The progress of digital satellite TV in Asia is often overlooked, because cable is such a dominant force on the continent. But satellite has been generating significant revenues for some time now and is making good progress in several territories - most notably in India.
Our research reveals that at end-2008 there were 38.1 million Asian homes with digital satellite as their primary TV service. Informa expects that number to double by 2014, when penetration will surpass 10% of TV homes.
In revenue terms, satellite-based pay TV is expected to generate $9.1 billion in 2014. ARPU appears to be in slow decline - as it reacts to competitor price cuts driven by cable and IPTV multi-play bundles.
Penetration levels vary considerably from country to country, although in general those with the highest cable penetration unsurprisingly have the lowest satellite penetration. The highest levels are found in Malaysia, where Astro continues to post solid subscriber growth, and New Zealand, where cable build-out is limited.
South Korea bucks this trend by making significant progress with digital cable while combining this with reasonable satellite penetration, although subscriber numbers there appear to have peaked. But it is India that provides the region\'s major growth. Operators such as Airteland Big TV are cutting prices to attract subscribers, and Informa expects India to have more than 40 million satellite TV homes by 2014.
But even the massive success of Indian satellite TV doesn\'t come without its headaches. For example, the weakening of the Indian rupee against the US dollar in recent months means the cost of importing set-top boxes has risen by 10-15%. The impact of this is exacerbated by the fact that most operators are already subsidizing the cost of the boxes to attract new subscribers.
Regulatory issues are also playing a major role in market development. Strong subscriber growth in 2008 was driven in part by the entry of mobile operators Reliance and Bharti. Broadcaster-backed players Dish TV, Tata Sky and Sun Direct TV feel that Reliance and Bharti have an unfair advantage. They are indignant over the Telecom Regulatory Authority of India\'s decision to ban satellite operators from carrying exclusive channels, forcing them to make their content available to all platforms.
The ruling has taken away leverage from the broadcaster-backed operators. With the content aspect of satellite TV competition neutralized, the battle has moved to price and distribution, where the mobile operators have the advantages of deep pockets and established and extensive national retail networks. The longer-established players fear that they will struggle to compete with the mobile operators adding pay TV to bundled packages.
What cannot be underestimated, however, is just how much the stellar performance of satellite TV operators since 2007 has shaken up the entire Indian TV market. Cable operators are looking to roll out conditional access-based digital services, even though the regulatory situation for CAS implementation is far from clear. But such is the speed of satellite TV growth that they can\'t afford to wait much longer.
Looking elsewhere, China has the potential to replicate, and even surpass, the satellite TV growth levels experienced in India. But, after a brief period of apparent liberalization, China\'s recent approach to media reform has been more conservative, particularly in the area of satellite TV, which it views as difficult to control and therefore a potential threat. The regime\'s more positive attitude to IPTV does at least offer some hope that it will at some time relent and license a commercial satellite service on a national scale - but that still seems some way off.
Adam Thomas joined Informa Telecoms & Media in 2000 as media research manager - [email protected]