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| Edited By: Tanvi Shukla |Source: |Updated: Sep 15, 2017, 02:01 AM IST
MUMBAI: A delightful offer or a marketing gimmick? Call it what you wish but Tata Sky’s latest pricing strategy is pretty attractive. A 50% price reduction in the hardware cost for DTH services is what the company is offering along with cheaper subscription rates.
Why such a steep cut? The rapid subscriber ramp-up — 1.5million subscribers in 16months since its launch - has resulted in large cost savings for the company which it has decided to pass to its customers, says Vikram Mehra, chief marketing officer, Tata Sky Ltd.
The reason, according to industry analysts, could also be that Tata Sky is ramping up its presence through aggressive marketing before the arrival of Anil Dhirubhai Ambani Group’s Blue Magic.
Analyst Chirag Negandhi of Enam Securities said: “A price reduction or a price war is very much the way to capture market share. This would happen even further and market leader Dish TV would soon follow the path.”
Another analyst called this a simple marketing gimmick to catch the consumer’s attention without having much substance in the offer.
Interestingly, Tata Sky had a promotional offer last year which gave a set-up box along with six months subscription free for Rs3,999, including Rs1,000 for installation charges. So, at Rs300 per month subscription, effective cost of the hardware became Rs1,199, which is Rs300 less than what the DTH service provider is offering today. Although, one must note that this was just a one time offer, not existing any more.
The market leader, Dish TV, with a 3million subscriber base, has no plans of going for price reduction. Jawahar Goel, business head, Dish TV, said, “With the content costs going up and taxations also not bringing in any relief, we are not considering price reduction right now.”
Dish TV offers various price points from Rs3,150 to Rs4,990 for the entire package giving subscription free from 3-12 months.
All these numbers coupled with comparatively small subscriber base show that DTH services right now are facing loses, taking a Rs1700 hit per subscriber on an average. The cost of buying and importing a set up box itself would be around $60. And it may just get worse soon with Reliance, Sun TV and Bharti coming in with their services.
