Videocon to launch DTH on 27 Apr, wireless telephone service in Aug

Consumer electronics maker Videocon group, which also has interests in oil and gas, is set to soon enter two new, albeit crowded and highly competitive, businesses. The group will launch its direct-to-home, or DTH, television service on 27 April and a wireless phone service in August, group chairman Venugopal Dhoot said.

The group will enter the pan-India DTH business through its recently registered subsidiary Bharat Broadcasting Corporation Pvt. Ltd and launch mobile phone services through its majority owned company, Datacom Solutions Pvt. Ltd.

The mobile phone business will initially be launched in the southern parts of India and expanded across the country over the next 12 months, Dhoot said in an interview.

The DTH service space is currently served by six well-entrenched companies with deep pockets. These include Reliance Big TV, Dish TV, Sun TV, Tata Sky, Bharti AirtelLtd and state-run Doordarshan. DTH is an investment-intensive business and even those companies that have been in it for more than two years, such as Dish TV, Tata Sky and Doordarshan, have not been able to make profits as yet.

Wireless telephony service, says Dhoot, is “synergistic” with the Videocon group’s core businesses.

Videocon is one of the country’s bigger consumer electronics makers, with a strong presence in the television market. Videocon Industries Ltd, the flagship group company that also houses the consumer electronics business, earned revenues of Rs9,754 crore in 2008-09 and a net profit of Rs854 crore. The company is likely to face fierce competition in the wireless services segment, too. By the time it launches its mobile phone services, the major worry for Dhoot will be whether the market has been already carved up by incumbents and other new entrants. The group has invested Rs300 crore and committed around Rs1,500 crore to the business.

There are currently 389 million mobile subscribers in India, according to a 2 April research report on the Indian telecom sector by ICICI Securities Ltd.

The GSM, as the commonly used global system for mobile technology standard is known, industry in India added 92.5 million subscribers in fiscal 2008-2009. Indian GSM operators added 10.8 million subscribers in March alone, against 9.3 million in February. These numbers don’t include Reliance Communications Ltd, which doesn’t disclose separate numbers for its GSM and CDMA, or code division multiple access, services.

Reliance Communications launched its GSM services earlier this year, while Tata Teleservices Ltd is poised to do so. Idea Cellular Ltd and Aircel Ltd have meanwhile already rolled out GSM services in some circles.