Airtel Digital customers spend more in July-Sept

An average Airtel Digital customer spent 4.1% more money on their DTH service in July-September period compared to the previous three months, beating back the seasonal effect of the monsoons and indicating that customers may be gradually spending more on their cable and DTH bills.

The monsoon season tends to see smaller recharges by prepaid customers, whether on mobile networks or DTH, due to a slight dip in income levels because of the heavy rains.

However, this year, the spending on Airtel Digital DTH service increased to Rs 163.24 per month on average from Rs 156.78 in the April-June period, indicating that they are activating more channels.

This number reflects only the network charge levied by Airtel Digital, and does not contain pay channel charges, which are not shown by the company as its revenue as they have to be passed on to the broadcasters.

The increase should come as a relief to broadcasters, cable companies and others involved in the ecosystem as it indicates that consumers may be willing to spend more as they get familiar with the new TV channel pricing regime introduced by TRAI in February.

The introduction of the new norms was followed by a sharp pull-back in spending by customers, both as a reaction to the unfamiliarity of the new pricing system as well as what they saw as a sudden increase in DTH and cable prices.

Broadcasters, such as Star India and Zee Entertainment, implemented price revisions after the new tariff system gave them the right to determine the selling price of their channels, increasing household bills.

According to DTH operator Tata Sky, for example, the money collected from consumers by DTH and cable companies and transferred to channel owners as pay-channel charges jumped by 40%-50% after the introduction of the new tariff order at the beginning of the year.

On the other side, many channels saw a sharp decline in their reach and popularity due to the high pricing and the resulting reluctance by consumers to subscribe to them.

Most broadcasters have reported a sudden drop in their advertising revenue in the July-September period. TV18 saw a decline of around Rs 200 cr, while Zee Entertainment saw its advertising revenue growth fall to 1.2% from around 20% before it revised the prices.


The numbers for July-September, however, also held a disappointment for the DTH company too.

DTH providers such as Tata Sky and Airtel Digital had seen a sudden increase in their subscriber additions in Apr-Jun after the introduction of the new tariff order.

This was ascribed to difficulties faced by cable TV customers in activating their required channels.

Unlike DTH customers, millions of cable TV subscribers were unable to change their base packs or activate their favorite channels for several months after the new tariff scheme was put in place in February.

As a result, many cable subscribers were put on a diet of only free-to-air channels for several months.

This was largely because of a lack of coordination between cable operators and their feed providers, and had led to millions of cable TV users shifting to DTH.

The sudden increase in sign-ups with DTH during the April-June quarter had led to expectations that more and more users will start shifting to DTH operators, who offer a superior experience in terms of enabling customers to activate and deactivate channels and packs.

“After the recent changes in the regulatory framework, I think we have been able to pick up almost 630,000 customers net additions in last quarter, which is a very, very big increase, a lot of it coming from the cable side. So,we are pleased with how that business has progressed,” Airtel CEO Gopal Vittal had said three months ago, commenting on the Apr-Jun numbers.

However, with cable operators getting their act together, the spurt seen in subscriber additions seems to have tapered off: The number of news subscribers added by Airtel Digital fell to just 1.8 lakh during the July-September period.