Reliance Communications in talks with Sun to sell DTH biz for Rs 2,000 crore

Telecom Lead Asia: Anil Ambani-owned Reliance Communications is in talks with South-based Sun Group to sell its DTH business for an estimated Rs 2,000 crore.

Reliance Communications is the second Indian telecom operator, which is facing tough competition due to the ongoing digitization move, to decide to exit from the DTH business.

Bharti Airtel, India’s #1 telecom operator, is in talks with Liberty Global and a couple of private equity firms to sell 25 percent stake in its direct-to-home (DTH) business. Both are trying to exit from satellite business due to financial issues.

Reliance Communications is trying to exit from DTH after running the business for 5 years. Reliance Communications launched satellite TV services on 19 August, 2008 and Reliance Digital TV now offers a Standard Definition, High Definition & High Definition-DVR STBs, along with largest channel bouquet.

The main aim of Reliance Communications is to reduce debt, estimated at Rs 37,000 crore.

Reliance Digital TV is available at more than 37,600 outlets across 8,350 towns in the country.

Though a report in Times of India on Monday mentioned about a possible deal with Sun Group, it did not give much details.

Reliance Digital TV currently has 4.6 million subscribers, with 9 percent share of the DTH market in India. Sun Direct has 8.5 million DTH subscribers. Sun Direct claims that it is also the only DTH player to offer 11 exclusive regional channels and services.

Reliance Communications’ DTH business has several firsts to showcase. It launched India’s first High definition cum Advanced Digital Video recorder (HD DVR), offering 200 hrs of recording, trick play functions & universal remote for operating three devices.

The company claims that its Set Top Box (STB) Failure Rate has gone down to 0.61 percent, which is amongst the best internationally and by far the best in India.

The (DTH) industry in India currently has about 30 million subscribers from six DTH operators Dish TV, Airtel Digital TV, Tata Sky, Sun Direct, Reliance Digital TV, Videocon D2H and  DD Direct.

The Indian DTH industry is poised to grow to 60 million subscribers by the end of 2013.

According to Media Partners Asia’s (MPA) annual research report, the DTH subscriber base in India will grow from 2.3 crore in 2010 to 6.4 crore by 2015, and 8.3 crore by 2020. The US is expected to be the second largest DTH market with 3.5 crore active subscribers.

The Indian cable TV industry’s total subscription revenue is estimated to grow to $6.4 billion by 2020 from $4.2 billion in 2011, according to Media Partners Asia.

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