GITAM SCHOOL OF INTERNATIONAL BUSINESS

PROJECT REPORT

ON

CUSTOMER PERCEPTION TOWARDS VARIOUS

DTH SERVICE PROVIDERS

Submitted by:

R.Shiva Shankar (1226112243)

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CONTENTS

SUMMARY 3

INTRODUCTION 3

OBJECTIVES 4

METHODOLOGY 4

INDIAN DTH SATELLITE INDUSTRY 5

CURRENT SCENARIO OF DTH INDUSTRY 6

STRUCTURE OF DTH INDUSTRY 7

ENVIRONMENTAL ANALYSIS 8

DATA ANALYSIS 12

FACTOR ANALYSIS 12

SCREE PLOT 13

COMPONENT MATRIX 14

ANALYSIS OF MEAN, SD& VARIANCE 15

TEST OF HYPOTHESIS 16

COCLUSION 17

QUESTIONNIARE 18

SUMMARY:

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The study is mainly all about the customer perception and comparison between DTH TV & Cable TV services and analysis various factors which influenced people to switch over from cable TV to DTH TV. So we analyze the factors which influenced people more to switch over and the study also said about the substitutes/ threats of DTH services such as IPTV, Online TV so that company make new strategy in future to face the new competition.

From this study we know the perception of the households towards various DTH TV players, cable TV so that they use it in company’s strategy to make them prepare for that competitive market. Various DTH players also use new technology to give more facility to the customers to avoid extra competition in the market. The market share of various TV network suppliers helps them to analyze their business so that they capture the opportunities & also the market share of various DTH players give them information to placed them in the market situation. All of this information helps players to carry DTH industry in a good position and helps to analyze future strategy.

From this study people also take advantage to choose the suitable TV network providers by analyzing the market environment.

INTRODUCTION:

In earlier days there was only one TV channel in India the “Doordarshan”, was owned and operated by government of India. In those eras every home which had a TV set used to have its own antenna to capture the signals. The Cable Television Ordinance Law was passed in January 1995. This enabled the growth of TV channels & cable operators created a big industry and market opportunities.

Until few years back there were as many as 1, 00,000 cable operators across India. However the services provided by cable operators were poor. The strikes, increase in tariff plan, selective broadcast and poor services were major cause of dissatisfaction among the customers. This has created an opportunity for DTH, which serves an immediate threat to the high-end cable networks. Some of the key players in the industry are Dish TV by Zee group, Tata Sky joint venture of Tata & Star TV, Big TV by Anil Dhirubhai Ambani Group, Digital TV by Bharti Tele media, and SUN Direct from the promoters of Sun TV. There are some other companies who are contemplating to start their own DTH like Videocon.

The Indian market was till now dominated by the presence of local cable TV operators and had complete monopoly over it. DTH opened an option for Indian Consumers to opt for the satellite service to obtain television channels direct to their homes without any intermediaries. It also provided several value added services to enhance their television watching experience.

There is an immense opportunity for DTH in the Indian market. The opportunity in India almost 10 times that in developed countries like the US and Europe. For every channel there is a scope

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for broadcasting it in at least ten different languages. So, every channel multiplied by ten that is the kind of scope for DTH in the country.

DTH can also reach the remotest of areas since it does away with the intermediate step of a cable operator and the wires (cables) that come from the cable operator to your house. In DTH signals directly come from the satellite to your DTH dish.

DTH offers better quality picture than cable TV. This is because cable TV in India is analog. Despite digital transmission and reception, the cable transmission is still analog. DTH offers stereophonic sound effects. It can also reach remote areas where terrestrial transmission and cable TV have failed to penetrate.

Apart from enhanced picture quality, DTH has also allows for interactive TV services such as movie-on-demand, Internet access, video conferencing and e-mail. In DTH, the payments will be made directly by the subscriber to the satellite company offering the service.

OBJECTIVES:

To examine on those factors that influence consumers to choose various DTH service

providers.

To determine whether there exists any relation between various 1) DTH Players &

Customer Satisfaction 2) Customer Satisfaction & Channel Package.

METHODOLOGY:

SAMPLE & POPULATION:

The sample size is which is sufficient to do the analysis more effectively. As a general rule of

thumb 100 data is more enough to analyze, however in the present study the total sample size is

the target population of the survey constitutes the population in GITAM College. I took the

Vizag area to collect the primary data from households.

DATA:

Here mainly primary data collected from the college students and my hostel mates by filling up

the questionnaire.

QUESTINNAIRE:

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The questionnaire is well designed and close ended type, so that people easily filled the

questionnaire according to their perception. People always flexible to give their answer

objectively. So here open ended question is more effective as the target population is households.

TOOLS & TECHNIQUES:

Factor analysis also to analyze the various influencing factors of DTH TV services which

influenced people to choose DTH services. Chi Square test to analyze whether there exists any

relation between various DTH players and Customer satisfaction, Customer satisfaction and

channel package.

SOFTWARE:

SPSS & EXCEL used here to analyze the primary data. SPSS is very useful here to effectively

analyze the data and get effective result which is reliable enough as sample size is sufficient to

analyze.

INDIAN DTH SATELLITE TV SERVICES:

DTH stands for Direct-To-Home television. DTH is defined as the reception of satellite

programmes with a personal dish in an individual home. DTH does away with the need for the

local cable operator and puts the broadcaster directly in touch with the consumer. Only cable

operators can receive satellite programmes and they then distribute them to individual homes.

DTH services were first proposed in India in 1996. But they did not pass approval because there

were concerns over national security and a cultural invasion. In 1997, the government even

imposed a ban when the Rupert Murdoch-owned Indian Sky Broadcasting (ISkyB) was about to

launch its DTH services in India. Finally in 2000, DTH was allowed. The new policy requires all

operators to set up earth stations in India within 12 months of getting a license. DTH licenses in

India will cost $2.14 million and will be valid for 10 years. The companies offering DTH service

will have to have an Indian chief and foreign equity has been capped at 49 per cent. There is no

limit on the number of companies that can apply for the DTH license. On the DTH front, TRAI

issued the guidelines for operating DTH. Country’s first DTH license was awarded to Dish TV in

2003 which started operations in 2004.

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In 2007, TRAI proposed a new initiative by name “Headed-In-The-Sky (HITS)” model as an

alternative to the existing cable distribution. Instead of the MSOs providing the bundle, there will

be a single HITS operator who will prepare the bundle of channels and beam it to the Headed in

the satellite. With the average Indian getting younger, and hence more likely to spend on

nonessentials, the entertainment industry has the potential to grow explosively in the future. Now

the industry is ready to enter a second stage of growth powered by the twin engines of

technology (availability of quality infrastructure and the accelerated penetration of digital

connectivity) and an enabling regulatory environment.

CURRENT SCENERIO OF DTH SATELLITE TV SERVICES:

In the current context of the global financial meltdown, the Direct to Home (DTH) industry in

India is in the throes of multifarious challenges and opportunities. The “big game” is all about

shaping up grandiose plans to master the winning rules to garner as much portion of the Indian

DTH pie as possible by a handful of players. Since the DTH space denotes “big value”, akin to

the space occupied by television and telephony, inter-firm rivalries have thrown up price wars,

discount schemes, procurement of transponders, ambitious targets for improving the subscription

base, popular bouquet of channels, set top boxes with superior quality of videos, improving

content, etc as a desperate means to entice the Indian viewer. A neat 20 per cent annual growth is

being witnessed in the DTH sector in India with over 16 million households having digital pay-

TV.

According to Harsh Bijoor, a brand consultant, “Since Dish TV, the biggest market player on the

Indian soil, has not scraped even five per cent of the pie, there is plenty left for other players to

eat”.

In the early 2008, five major players, Zee’s Dish TV, Tata Sky, Reliance ADAG, Sun Direct and

Bharti Telemedia formed an umbrella body – DTH Operators Association of India (DOAI). Dish

TV is the largest DTH provider with a subscriber base of around 5 million, Tata Sky, a DTH

joint-venture Company between Star (owned by Rupert Murdoch) and the Tata Group (20:80),

now has around 3.4 million connections and the forecast for 2012 is that it will further increase

to eight million, Sun Direct, the 80:20 JV between the Maran family and the Astro Group of

Malaysia, over 2.3 million, Big TV about 1.2 million and Airtel Digital TV about 0.3 million

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subscribers (Source: Business Standard, May 1, 2009). According to sources, DD Direct Plus has

a subscriber base of about 3-4 million subscribers, mostly in the remote corners of the country

not connected by terrestrial or cable television.

DTH operations in India could be enhanced if the dearth of satellite capacity is removed by

increasing the number of available Ku-band transponders that at present is 12 on Insat 4A, which

in turn would mean more channels for viewing.

Tax burdens on DTH are another area of complaint for operators. Around 40 per cent of

revenues are siphoned off to pay taxes and license fee and another 12 per cent for services

imposed by the Central government. Apart from this, there are entertainment taxes that differ

from state to state.

STRUCTURE OF THE DTH INDUSTRY:

The structure of the DTH industry in India can be categorized as an “Oligopoly”.

The word Oligopoly is derived from the Greek for few (entities with the right to) sell.

An oligopoly is a market form in which a market or industry is dominated by a small number of

sellers (oligopolists).

An oligopoly is a market dominated by a few large suppliers. The degree of market concentration

is very high. Firms within an oligopoly produce branded products and there are also barriers to

entry.

Key characteristics of “Oligopoly” are following:

1) Few larger supplier dominates the market

2) Interdependence between firms

3) Each firm produces branded products

4) Significant entry barriers into the market in the long run which allows firms to make

supernormal profits

5) Each oligopolist is aware of the actions of the others.

Analysis of the Indian DTH industry:

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Indian DTH industry is still at nascent stage. In the year 2003 DD Direct+ was launched since

DD Direct+ is non commercial and free DTH service hence we would focus our discussion on

private players in the industry.

As of now Dish TV, Tata Sky, Big TV, Airtel Digital TV, Sun Direct are in the industry. There

are some other players like Videocon, who want to join this high lucrative industry. Since there

are only 3 major players and the market concentration is very high Indian DTH industry is

oligopolistic.

DTH faces stiff competition from the terrestrial, cable and IPTV. As per the industry estimates,

there are 130 million TV homes of which 85 million are served by cable and around 16 million

by DTH with the remaining taken by terrestrial transmission.

Terrestrial Television:

Doordarshan is the world’s largest terrestrial broadcaster with over 1400 terrestrial TV

transmitters. The reach provided by this route is phenomenal with Doordarshan covering 88% of

India’s geographical area. Covering the remaining 12% area required substantial capital

investments which does not outweigh the benefits. The transmission was done originally in

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Analog mode but beginning from 2002, Doordarshan has partnered with BBC resources – the

consulting wing of BBC, in offering digital terrestrial TV. The transmission could be received

using a low cost Yagi antenna. However, due to lack of attractive content it does not seem to be a

formidable threat for DTH.

Cable TV:

Cable TV currently operates in 2 modes viz. through CAS covering cities like Chennai, Delhi,

Mumbai and Kolkata, and through non-addressable system in the rest of the country. As seen

from the above diagram Cable TV enjoys the maximum share as compared to other medium. In

case of CAS controlled areas, the subscriber has to buy Set Top Box (STB) to see the pay

channels. On the other hand, in areas where non-addressable system is used, nearly all the

channels are available without the need of any separate receiver by paying anywhere between Rs

100 to Rs 350 per month depending on the place. Due to phenomenal reach of Cable TV, it poses

a serious threat to the growth of DTH industry.

Internet Protocol Television (IPTV):

IPTV is a service where television signals are digitally sent over the telecommunications line. It

is often presented as a bouquet of Video (IPTV), Audio (Telephone) and Data (Broadband

Internet) services. With widespread adoption of broadband in the country and the growing techno

savvy population, IPTV has a potential to become a huge success. IPTV takes the interactivity to

a newer level. In regular mediums, all the channels are pushed to the consumer regardless of his

preference. IPTV encourages a two-way request response model where the consumer chooses the

programs he wants to view. Right now those medium is totally unregulated and cable companies

are urging the TRAI to issue a consultation paper process to include IPTV under the aegis of

Cable TV act. IPTV is a considerable threat to DTH in urban and semi urban areas where

broadband has made its mark.

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1. Online TV:

The World Wide Web is changing lot of things, the way data & information are stored, and

shared has changed dramatically. Web 2.0 offers users to watch TV programs online. There are

already websites like:

www.indiatvonline.com

www.tvdekho.com

Apart from this website TV channels are also streaming live videos of their programs.

Online TV though is a niche industry as of now but with increased penetration of broadband

connection, it can pose significant challenge to DTH industry.

2. Bargaining power of suppliers:

DTH industry relies on three major supplies: Customer Premise Equipment (CPE) comprising of

the satellite dish, Set Top Box with the necessary Access card, the Ku band transponders in the

orbiting satellites and content. With India overtaking Japan as Asia’s largest DTH, the

bargaining power of Indian DTH operators with CPE supplies have increased.

However, the availability of transponders is increasingly becoming difficult. The Ku band

transponder is generally provided by Astrix, the commercial wing of ISRO either through its

own satellites or by leasing transponders from suppliers. With only two domestic satellite

launches between 2007 and 2010 an d increasing DTH players, Astrix is in a better position to

use DTH as its cash cow for the next 5 to 10 years. Also the crash of INSAT 4C and NSS-8 has

worsened the situation of DTH players. As there is not much of regulation particularly in terms

of channel pricing, acquiring content from the broadcasters is also difficult. DTH vendors are at

the mercy of the broadcasters.

3. Bargaining power of buyers:

With enough options to choose both from the pont of alternate mediums like Cable, IPTV and

Terrestrial broadcast and from the point of increasing DTH operators, the consumer is at his will

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to decide. Customers will continue to have a high bargaining power until DTH platforms try to

differentiate them as superior players with better content and clarity.

4. Inter firm rivalry:

With 6 operational players, the inter firm rivalry is quite high. The competition from state owned

DD-Direct to private players is negligible from the content point of view as the number of

channels offered by DD-Direct is very limited. However, DD-Direct does not charge any

monthly subscription fee which poses a threat to the private players. Between Dish TV and Tata

Sky there is an intense rivalry exhibited by price wars and discount schemes offered to new

connections. Being the first mover, Dish TV has price advantage

in both the STB as well as procuring the transponders. On the other hand, Tata Sky claims its

STB having superior DVD quality video.

Other than price wars and intense competition in increasing customer base, there is also a

competition at acquiring the content. Dish TV, Tata Sky and Sun Direct are part of big groups

that also have popular bouquet of channels like Zee, Star and Sun respectively. The channels

indirectly refuse content for DTH operators by charging exorbitantly or mandating that all the

channels of their bouquet to be transmitted when the vendor is already capacity constraint.

5. Threat of new entrants:

With already 6 players in the DTH space, threat of new entrants is relatively low. There is

already enough competition which will discourage new firms to enter this business. While

getting a license is relatively easy, the barriers to entry are high when it comes to pricing of CPE

and getting the required transponders.

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DATA ANALYSIS

FACTOR ANALYSIS:

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy. .740

Bartlett's Test of Sphericity Approx. Chi-Square 246.305

Df 45

Sig. .000

The result of KMO (0.740) and Bartlett’s Test of Sphericity (Chi-Square- 246.305 &

significance- 0) indicates that Factor analysis done with the 10 service related variables are

effective. There were three factors extracted using the method of Principle Component Analysis

and Rotation Method of Varimax with Kaiser Normalization, with criteria of Eigen values

greater than 1. Following table show the value of eigenvalues of various variables.

Total Variance Explained

Compo

nent

Initial Eigenvalues Rotation Sums of Squared Loadings

Total % of Variance Cumulative % Total % of Variance Cumulative %

1 3.514 35.140 35.140 2.232 22.322 22.322

2 1.230 12.295 47.435 1.908 19.084 41.405

3 1.166 11.663 59.098 1.769 17.693 59.098

4 .900 9.001 68.099

5 .708 7.084 75.182

6 .705 7.053 82.236

7 .613 6.133 88.369

8 .516 5.155 93.524

9 .354 3.536 97.060

10 .294 2.940 100.000

Extraction Method: Principal Component Analysis.

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SCREE PLOT:

COMPONENT MATRIX:

Rotated Component Matrixa

Component

1 2 3

PictureQuality .681

ChannelPackaging .745

ServiceDisturbtion .827

ExtraService .766

QuickService .766

OnlinePayment .572 .545

Facilities .644

CelbrityEndorsement

DirectConntact .665

ElecricityDisturbance .835

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ANALYSIS OF MEAN, SD & VARIENCE:

Descriptive Statistics

N Minimum Maximum Mean Std. Deviation

PictureQuality 100 2.00 5.00 4.3800 .70754

ChannelPackaging 100 1.00 5.00 4.0800 .88398

ServiceDisturbtion 100 1.00 5.00 3.9700 1.00960

ExtraService 100 1.00 5.00 3.8000 .95346

QuickService 100 1.00 5.00 3.7900 1.00800

OnlinePayment 100 1.00 5.00 4.0100 1.05883

Facilities 100 1.00 5.00 3.6000 1.04447

CelbrityEndorsement 100 1.00 5.00 3.2800 .89983

DirectConntact 100 1.00 5.00 3.6200 .91872

ElecricityDisturbance 100 1.00 5.00 3.0800 1.07947

Valid N (listwise) 100

It is clear from table that the mean of the most of the variables is more or less over 3, i.e.

consumers are agreeing with most of the related variables being present in a positive manner

among the service provider. Maximum customers agree to accept that these variables are the

most influencing factors to switch over from cable TV to DTH TV. Higher means of variable

picture quality indicates that according to the user’s picture quality is the main influencing

attribute towards consumer buying behavior. No disturbance & no both ways electricity

disturbance has also high mean variable these also a good influencer. Whereas extra service,

online payment & celebrity endorsement has no such type affect on buying behavior of

customers.

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Test of Hypothesis:

1) For DTH Service Providers & Network Satisfaction

Chi-Square Tests

Value Df

Asymp. Sig. (2-

sided)

Pearson Chi-Square 14.594a 8 .068

Likelihood Ratio 11.928 8 .154

Linear-by-Linear Association 2.537 1 .111

N of Valid Cases 100

Hypothesis: There is no significant relationship between the ‘DTH Service Providers’ and

‘Network Satisfaction’

According to the output, the calculated chi-square value is 14.594 at degrees of freedom 8 and at

5% level of significance.

The table value at degrees of freedom 8 and at 5% level of significance is 15.507.

Result:

The calculated value 14.594 is less than the table value 15.507. So, we accept the hypothesis.

Hence, there is no significant relationship between the ‘DTH Service Providers’ and ‘Network

Satisfaction’.

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2) For Network Satisfaction & Channel Package

Chi-Square Tests

Value Df

Asymp. Sig. (2-

sided)

Pearson Chi-Square 6.002a 4 .199

Likelihood Ratio 6.019 4 .198

Linear-by-Linear Association .141 1 .707

N of Valid Cases 100

a. 4 cells (44.4%) have expected count less than 5. The minimum

expected count is .15.

Hypothesis: There is no significant relationship between the ‘Network Satisfaction’ and

‘Channel Package’

According to the output, the calculated chi-square value is 6.002 at degrees of freedom 4 and at

5% level of significance.

The table value at degrees of freedom 4 and at 5% level of significance is 9.488.

Result:

The calculated value 6.002 is less than the table value 9.488. So, we accept the hypothesis.

Hence, there is no significant relationship between the ‘Network Satisfaction’ and ‘Channel

Package’.

.

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CONCLUSION:

On the basis of the data collected and the tests conducted I have arrived at the following

conclusions:

Cross tabulation between DTH service provider and overall satisfaction showed that there were

lots of dissatisfied customers of DTH services. Also cross tabulation between Customer

Satisfaction & Channel Package there exists no relation between these two factors.

There is high association between network provider and satisfaction of the services they get from

network provider. The most important factor came out is to be picture quality and no disturbance

of services.

There is also high association between switch over and various influencing factors. Extra

Service, Online Payment, Channel Package & Quick Service are more affective here.

In factor analysis, I found out 3 factors which mainly have an impact on consumer buying

behavior or influence customer to switch over from cable TV to DTH TV or buy first TV

network service.

I also found out the market position of various alternatives of DTH TV players. They are

growing now.

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Name: ______________________________

Telephone No: _______________________ Address:____________________________

______________________________________________________________________________

1) Which type of connection are you using?a) Cable TV b) DTH Connection c) IPTV

2) If DTH, then which service provider are you using?

a) DISH TV d) Videocon D2Hb) TATA SKY e) Reliance Big TVc) AIRTEL Digital TV f) Others

3) Are you satisfied with your present service provider?a) Yes b) No

4) If Yes, State the reason for your satisfaction.

a) Reasonable Price c) Affordable Tariffs e) Good Reputationb) Extra services d) Better Quality f) Low Disturbance

5) Are you planning to change your present service provider?

a) Yes b) No

6) Is DTH services are better than local cable TV services.

a) Strongly Agree b) Some What Agree c) Some What Disagree d) Disagree

7)  Please rate how satisfied you are with your current DTH service.

Factors Excellent Very Good Average Not Satisfactory

Price

Channel PackagePicture Quality

Ease of PurchaseEase of PaymentQuality of Service

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Helpline

Quick Response to Complaints

8) To which age group do you belong?

a) Between 20 – 30 b) Between 30 – 40 c) Between 40 – 50 d) Above 50

9) What is your salary package per month?

a) Below 15,000 b) Between 15 to 30,000 c) Above 30,000

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