How Does DTH Work?

A DTH network is dependent on a broadcasting center, satellites, encoders, multiplexers,

modulators and receivers. In order to provide DTH service, the service provider has to rent Ku-
band transponders Irom a satellite. The encoders are used Ior converting the audio, video and
data signals into the digital Iormat and the multiplex is used Ior mixing the signals. To view the
television channels, the end user has to use a small dish antenna and a set-top box Ior decoding
the signals.
The way DTH reaches consumers is entirely diIIerent Irom how the cable television service
does. In DTH, consumers receive TV channels directly Irom the satellite through a small dish
antenna mounted on the window or rooItop oI the subscribers homes. Unlike cable TV, DTH can
reach the remotest areas, where terrestrial transmission and cable TV are not available. This is
possible because DTH does away with the need Ior terrestrial television broadcasting towers or
the need Ior drawing cables to every home. Moreover, DTH users can access nearly 700
channels depending on the capacity oI the set-top box they use.
DTH oIIers better picture quality than cable TV as it provides reception in the digital mode.
Despite many television channels being transmitted in the mode, the last line transmission
through cable TV is still analog, thus aIIecting picture quality. DTH also oIIers stereophonic
sound eIIects.
In addition, DTH also allows Ior interactive TV services such as movie-on-demand, Internet
access, video conIerencing and e-mail. ThereIore, the powerIul broadcasting companies like star,
Zee, etc., are pushing Ior it. Recently, Tata Sky, one oI the major DTH players in India, launched
Tata Sky plus which oIIers an advanced set-top box that allows the viewer to simultaneously
pause, record and play diIIerent channels. Sun Direct has begun oIIering High DeIinition (HD)
channels, which ensure visuals oI crystal clear quality, Tata Sky, Bharti`s Digital TVand
Reliance`s Big TV have Iollowed suit.
Television broadcasters too are pushing Ior DTH because it brings in greater transparency
regarding the number oI subscribers, and thus increases their subscription revenue. In the cable
TV system, the local cable TV operators (called Access Cable Operators or ACOs) under report
the number oI subscribers that they have, because they have to pay on a per house hold basis to
the Multi-system Operators (i.e., MSOs such as Siticable, In Cable, etc.), who in turn share the
revenue with the television broadcasters. There is no way oI cross-checking the subscriber base
reported by the ACOs, as a result oI which the MSOs and broadcasters lose a lot. To quote
Kalanidhi Maran, CMD oI Sun TV Network, 'The greatest challenge Ior the broadcasters is the
cable TV industry. It is, the last mile part oI it the distribution. It has to be organized, Nobody
knows the subscription numbers.
Broadcasters thus continue to depend mostly on advertising revenues to cover their cost, which is
not sustainable and does not oIIer adequate growth in revenue Ior them. In DTH service, every

user receives encrypted content through a set-top box, which makes it clear as to how many
subscribers there are.

#egulations Pertaining to DTH Operations.
Some oI the important pertaining to DTH operations are:
Any player applying Ior license to oIIer DTH services in India must register under the
Indian Companies Act,1956.
Total Ioreign equity holding in any Iorm, i.e., FDI, NRI, OCB or FII, in the company that
is applying Ior license should not exceed 49.
Further, within the ambit oI Ioreign equity, the FDI investment cannot exceed 20.
The CEO oI the applicant company must be an Indian resident, and management control
must be retained by the Indians in the board.
No broadcasting companies or cable network companies can own more than 20 oI the
total equity oI the applicant`s DTH service provider-company at any point oI time during
the license period. Similiarly, the applicant company is also not allowed to own more
than 20 equity share in any broadcasting or cable network company.
Procedure for Application and Grant of License.
The applicant should apply to the Secretary, Ministry oI InIormation and Broadcasting Ior DTH
license. II the applicant is Iound eligible Ior oIIering DTH services in India, then the application
will be Iorwarded Ior security clearance in consultation with the Ministry oI Home AIIairs.
ThereaIter, the application will be sent Ior clearance oI satellite usage to the Department oI
Space. AIter these clearance are obtained, the applicant has to pay an initial non-reIundable entry
Iee oI Rs. 10cr to the Ministry oI InIormation and Broadcasting. The applicant will then be
issued a license-to-entertain by the Wireless Planning & Coordination (WPC) wing oI the
Ministry oI Communications & InIormation Technology, which would be valid Ior a period oI
10 years Irom the date oI issue. However, the license can be cancelled or suspended by the
licensor at any time in the interest oI the Union oI India. During the license period, the license is
required to pay an annual Iee equivalent to 10 oI the gross revenue earned during each
Iinancial year, within one month Irom the end oI the Iinancial year. A bank guarantee oI Rs.40 cr
valid during the period oI license is also required to be given. The licensee has to also pay
royalty Ior the satellite spectrum used, as prescribed by the WPC authority.