DTH News: Reliance Big TV may Shut Down Next Month According to Sources

DTH News: Reliance Big TV may Shut Down Next Month According to Sources. Anil Ambani Group can close Reliance Digital TV next month. Reliance Digital TV, the DTH arm of Anil Ambani Group, is scheduled to close next month, according to a photo of an advertisement that allegedly appeared in a regional newspaper. The DTH service has about 5 million subscribers (50 lakh).

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DTH News: Reliance Big TV

"This is a notice for all Reliance Digital TV subscribers," the announcement said. "As our license expires, we will close our DTH service across India on November 18th."

Update: Tata Sky and Dish TV Offers Reliance Big TV Users Migration Deal

The announcement, whose truth has not been confirmed, urges subscribers to make alternative arrangements to continue watching their favourite channels.

Asked if the company had released that announcement, a Reliance Group spokesperson said the company would respond tomorrow (Monday).

Calls to the company's customer service are not answered, and pre-recorded messages are received indicating that the call can not be answered due to "emergency conditions".

Several channels that were transmitting on the platform are also unavailable.

Reports of a possible shutdown come as a result of Reliance Communications' financial problems, which Reliance Big TV owns the DTH service. At least two suppliers providing services to RCom filed insolvency proceedings against the company, Ericsson and Tech Mahindra.

Reliance Big TV started DTH operations in 2008 and received a 10-year license in 2007. That license will expire soon, forcing the company to re-evaluate its options. DTH operations are costly because of the costs involved in leasing the satellite spectrum and paying broadcasters for the content.

Spectrum alone is likely to cost Rs 80-100 cr per year for a player like Reliance Big TV. Other expenses, such as customer service, distribution and hardware are also substantial. However, RCom has been gradually reducing these operations in recent years.

Nor has it been slow to expand into HD, unlike other competitors. Even Sun Direct, which shares spectrum with RCom, has aggressively expanded towards HD in recent months and now has 60 HD channels.

Despite such probabilities, it would be surprising if the company simply let its subscribers move on to another service. For example, even if a player like Sun Direct bought subscribers at 500 rupees each, the company could generate profits of a few hundred million rupees.

Currently, DTH companies spend between Rs 1,000 and Rs 2,000 to subscribe to a single subscriber in the form of direct acquisition costs. This is in addition to the money they spend on advertising.

In addition, Sun Direct relies on Reliance Digital TV to stream dozens of its standard definition channels and can seamlessly transition to RDTV clients on its network. Rcom had said in June that it was looking to sell the DTH business.

Perhaps anticipating an outage, the Chennai-based DTH player has been shuffling their channels over the past few days. It also began migrating its HD channels to HEVC mode to make room for additional channels. Part of the space released has been used by Sun Direct to convey the standard definition.

It is likely that in the event RCom closes its DTH business, Sun Direct will be able to take over the capacity of the satellite transponder currently leased by Reliance Big TV.

Both services use the same satellite - Measat 3, and the channels can be passed from one to the other without requiring any intervention at the end of the user.

RCom fell on hard times due to the emergence of 4G technology, which made its CDMA-based data services not competitive. The company also closed its CDMA voice service to sell much of the spectrum to Reliance Jio, a new 4G operator led by Mukesh Ambani, the brother of Anil Ambani, president of Reliance Communications.