Prasar Bharati to bid out DTH operations to private players

Source of Articles:  Financial Express, The Indian Express Online Media Ltd

September 20, 2011

In what would be a first for a public service broadcaster anywhere in the world, Prasar Bharati is set to outsource the operational and technical management of its free-to-air direct-to-home (DTH) service DD Direct+ to private DTH operators like Dish TV, Tata Sky and others based on a tendering process.

Sources said Doordarshan will float a request for proposal (RFP) this week which will invite eligible private DTH and teleport operators to take over the operational command and control of DD Direct+ for the next five years for a fixed monthly fee.

The move, according to DD officials, is aimed at cutting costs and maximising the revenue of DD Direct+, especially when it is gearing up to boost its channel capacity from 59 to 200 and beyond in 6-8 months. "Why should government officials manage DTH services at a higher cost when private agencies can do it more efficiently," an official said, justifying the need to involve private agencies to run DD Direct+.

Doordarshan spends R35-40 crore every year to operate 59 channels on DD Direct+ (including 22 DD channels) whereas private operators manage over 230 channels on their respective DTH platforms at nearly half the cost (on a per channel basis), sources said. Under the proposed arrangement, private operators will manage the entire technical back-end of DD Direct+ including uplink and downlink of channels, quality control, expansion and subscriber management, among others.

In order to attract only serious private players, Doordarshan will keep the networth requirement for bidders at R200 crore, which means only DTH firms like Dish TV, Tata Sky, Digital TV, Sun Direct and others can qualify. Among teleport operators, Essel Shyam and HFCL, among others, are said to have a net worth above R200 crore.

Private firms can bid as a company or a consortium, DD officials told FE. "Any DTH or teleport operator which has an experience of operating a minimum of 30 channels on MPEG-2 technology and having a net worth of R200 crore will be eligible. It will be a two-stage closed tender process and the RFP will be issued within the week," a senior Prasar Bharati official told FE.

This is not the first time private firms have associated with DD Direct+, which recently adopted electronic auctions as the mode for allocating space to private channels. Two rounds of e-auctions have successfully been conducted by a Mumbai-based private auctioning agency.

The e-auctions for 26 slots generated record revenues of R63 crore from private broadcasters. This is more than thrice what it used to generate before migrating to e-auction mechanism two months ago, charging Rs 80 lakh/slot.