Tata Sky DTH to focus on differentiated product offering

In my previous posts, while analyzing Tata Sky’s strategy, I had suggested that Tata Sky’s emphasis has always been more on quality, service and experience rather than the cost.

I came across this article on the Hindu newspaper which only validates what I have mentioned on my posts. In this article, you hear about Tata Sky’s strategy from Vikram Kaushik, the managing director and the CEO of Tata Sky. At a press conference, he said that Tata Sky would always strive to acquire ‘quality customers’. In this context, he explained that Tata Sky would not be so much focused on the ‘bottom of the pyramid’ clients, who tended to come on to the DTH network and remain active customers only for a transitory phase until the currency of a particular event like the Indian Premier League (IPL). There was a huge initial cost for acquiring such clients. Besides this, there was operating costs for such clients, he said.

Mr. Kaushik said it made no sense for Tata Sky to drive its business by concentrating its efforts around clients with lower ARPU (average revenue per user). In this context, he said DTH should be considered more as an infrastructure industry for pay television rather than a pure entertainment business. He made it clear that the focus of Tata Sky would be on providing value for money for customers who were either at the top or the middle of the pyramid. Mr. Kaushik said the DTH players had to contend with an unequal play field vis-À-vis the cable operators, who could afford price wars due to various factors. While admitting that mandatory digitalisation of the cable television could make the playing field somewhat level, the MD called upon the Government to bring down the incidence of taxation on the DTH industry.

Now that you have heard from the man himself, you can be assured of Tata Sky’s commitment to quality as well as expect differentiated products offering from them. One thing which especially I realized from this article was that we always complain about the high costs of DTH. But what we don’t realize is that high taxation levels by the govt account for a large share of this. It is a situation similar to what exists in aviation and hospitality industry. So a lot of the blame for the costs apportioned to DTH providers is quite unfair.

For the complete article, check out the following link:

http://www.hindu.com/2009/06/03/stories/2009060351151300.htm