Space TV, the DTH (direct-to-home) television services joint venture between the Tatas and Star, has obtained FIPB clearance, paving the way for Star to bring its foreign equity into the project.
Space is currently looking at a launch between Diwali and the end of the year. A recent Space TV presentation to the Union information & broadcasting ministry had mentioned an introductory price of Rs 4,999 per subscriber, but sources said the DTH service may be launched with a price tag of Rs 2,999.
The launch date of Space TV's services is close, with the JV putting its act together on the manpower front. Vikram Kaushik, who recently quit Colgate-Palmolive, will head the Space TV operations in India .
Until recently, Mr Kaushik was working as executive V-P (marketing) with Colgate. He joined Colgate in November '99 after a short stint with Britannia Industries as V-P (marketing).
Space TV has also appointed Shankar De, a merchant banker, as its CFO. Mr De, among other assignments, has worked for the international investment banking firm Rothschild. Mr Kaushik and Mr De are expected to kick off senior-level recruitments at Space TV soon. Industry sources said that with the basic norms of DTH licensing having been satisfied by Space TV, the I&B ministry is expected to issue the DTH service-provider a letter of intent (LoI) soon.
This will pave the way for other clearances such as the one from the Union home ministry. Star India CEO Peter Mukherjea was not available for comment. Tata Sons, the holding company of the Tata Group, has an 80% equity stake in the Space TV venture while Star keeps the rest
Though both Star and the Tatas have been hush-hush about the terms of the alliance, it is known that the content and technology will be provided by Star while the Tatas' equity will include the uplinking infrastructure it provides through VSNL.
DTH services in international markets have several pricing tiers, depending on the number of channels a subscriber opts for.
The basic service, usually a 20-channel bundle, comes cheap, but packages that include sports and movie channels are higher priced.
While the cost of the hardware - a small dish antenna, a set-top box and smart card that activates the channels - costs around Rs 6,000, Space TV and Zee's Dish TV are looking to heavily subsidise the start-up costs to get higher subscriber numbers, a la NewsCorp's BSkyB operations in the UK.
STAR's Hong Kong-based CEO, Michelle Guthrie, who was recently in India to make a presentation at Ficci's 'Frames' convention, had made a strong pitch for DTH.
She recounted the huge success of its UK operations, BSkyB, which in a short span had grown to offer 400 channels and a host of interactive services, including banking and gaming. BSkyB's subscriber base in the UK has already crossed 7m.
"The launch of DTH opens up a new era for satellite television in India, eliminates the need for the last-mile operator, provides choice to a consumer, increases transparency and product offerings," she said.
The Subhash Chandra-promoted ASC Enterprises was the first to receive the government's LoI for offering DTH services last June. The company launched its DTH service under the 'Dish TV' brand on October 2, '03 . Dish TV currently offers 48 channels, but Star refused to put its channels on the platform.
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