That is what DTH service providers are chanting as they seek to build scale the way mobile phone operators have. Will they also bleed the same way in the initial years?Vikram Mehra, the chief marketing officer of Tata Sky, who was in Rajasthan last week, would have you believe that he has been going on “market visits” ever since the company’s direct-to-home (DTH) service started three years ago. However, it is difficult to shake off the feeling that these “visits” have multiplied as this sector has moved from being a two-pony race to an open marathon.“Now you will also link Tata Sky’s new Rs 99-a-month offer for 53 channels to greater competition,” Mehra smirks, insisting that the real reason behind the low-value pack is to push his DTH brand deeper into the country.It is not difficult to see why Tata Sky is trying to increase its subscription in smaller towns. Reliance ADAG’s Big TV DTH, which launched last month, is already claiming leadership in gross additions to DTH subscriptions. Jawahar Goel, Zee group vice-chairman and the driver of its DTH business, Dish TV, boasts of 750,000 new customers in the last five months. “You must be disappointed if you expected to see me worry over fresh competition. I am growing my business,” he says.No one may be worried, but everyone is drawing up new plans and fine-tuning the old ones. As the skyline gets increasingly dotted with little upturned umbrellas, Dish and Tata Sky can no longer afford to trot the way they have these last few years. With the launch of Sun Direct, Kalanithi Maran’s DTH platform, in the north, and the entry of big telecom players like Reliance and Bharti (the latter is expected to start in two months), the industry is cantering and galloping.If Mehra is worried about the entry of new players, he doesn’t show it. Reliance and Bharti are formidable players but they will only help the industry explode, he argues. Sample some numbers. In the next 12 months, DTH companies hope to hook another 10-12 million customers, taking the figure to 16-18 million subscribers, nearly three times the current number. According to a Ficci-PricewaterhouseCoopers media report, by 2010 there will be 25 million DTH homes in India. Says Big TV DTH CEO Arun Kapoor: “I’m gung-ho about the industry. By 2015 there will be 60 million DTH homes.”That is reminiscent of mobile phone services before the explosion in their subscriptions. The fact that some new DTH players belong to groups that have formidable mobile phone operations has changed the lingo (ARPU, or average revenue per user, the health check for mobile phone services, has infiltrated the DTH industry) and fuelled dreams. Media industry experts agree that DTH is poised to go the way of the mobile phone and acquire scale.Price like a phone To begin with, DTH operators have started cutting prices to become more affordable. After all, the mobile phone boom began when incoming calls became free and Mukesh Ambani sought to realise Papa ka Sapna of making a phone as affordable as a postcard.The cost of acquiring a DTH connection has become half of what it used to be when the service first began in India. Dish TV is now offering a set-top box for Rs 2,190. Sun Direct’s set-top box costs Rs 2,000. “In the south we have also priced our connection at Rs 2,000 to compete with Sun,” says Big’s Kapoor.All of them have created innovative packages of the channels on their platforms. In a new offer, Big TV delivers 50 channels for a monthly subscription of Rs 100. Dish is charging the same amount for 125 channels. The fine print, however, shows that Dish’s offering includes 21 radio channels. Tata Sky, meanwhile, has launched a new pack of Rs 99 for 53 channels. “The difference is that we offer ‘real’ television channels in the bouquet,” says Mehra.There are 125 million homes in India with television sets, of which about 80 million are cable and satellite (C&S) homes. DTH operators have trained their sights on the C&S homes. It’s not clear whether the 45 million non-C&S homes are not in a position to pay for the service or whether they are in areas not covered by C&S. If the first is true, they cannot be expected to fall for DTH.Predictions of a DTH boom are also based on the fact that more and more people are buying television sets. India sells 12 to 14 million colour TVs in a year. “Of these, 4-5 million are in the 29 inch-plus category. That’s a clear target for a DTH service,” says Kapoor.Tata Sky has introduced an electronic programme guide (EPG) in Hindi to revisit its image as an “elitist” brand and expand its customer base. “People in small towns are more comfortable in Hindi. Also, the perception was that Tata Sky was a premium product which the masses could not afford. We want to change that impression with the Rs 99 monthly subscription offer and the Hindi EPG,” says Mehra.To back its new image of being a more “accessible” brand, the company hired Aamir Khan as its brand ambassador and created a commercial in which he plays both the husband as well as the wife. Mehra says the characters are what the mass market can identify with and their language is easily understood. He harps on the brand values of Tata’s trust and Sky’s technology.With super stars like Aamir Khan and Shah Rukh Khan (who endorses Dish) now part of this new product category, the DTH market is in for a high-decibel marketing blitzkrieg. The buzz is that Saif Ali Khan will walk the talk for Airtel’s DTH.Predictably, Bharti Airtel president Atul Bindal is silent on the matter. “Our (advertising) spends will be in line with our objective to establish ‘Airtel’ as a dominant brand in the DTH category and we will take all the steps necessary to ensure that the product and the brand get adequate visibility and exposure in the market,” he says.Meanwhile, Dish TV has renewed its contract with Shah Rukh and Tata Sky has carpet bombed the print and television media with the Aamir Khan commercial. Big’s “Ho to BIG Ho” commercial uses television and radio in a big way. Kapoor does not rule out using stars like Abhishek Bachchan (or the rest of the Bachchan family), who has endorsed Big FM. However, right now he’s pushing the product for its features.“Heavy spends on communication will be the other big reason for the category to explode,” says Zee’s Goel. His estimate is that the sector will spend Rs 800 crore on advertising in the next 12 months. Kapoor pegs it at Rs 1,000-1200 crore. “Like telecom, the category will depend heavily on advertising,” he says.Reach like a phone To cash in on the growing awareness of the service, DTH companies are spreading distribution networks far and wide. Those that belong to a group that also has a mobile phone service provider, hope to ride piggyback on their sibling’s distribution network. Says Bindal: “We are putting in efforts to reach the last town to replicate a footprint that’s similar to that of Airtel’s prepaid re-charge value chain. We have 923,472 outlets across India through which we sell pre-paid and post-paid subscriptions as well as value-added offerings. We are looking at leveraging this network for our DTH service.”To service its soon-to-be launched DTH business, Airtel has a 24X7 call centre and a company-trained activation and service staff across 62 locations. Big is available at 88,000 outlets, including 240 Reliance World and 2,000 Reliance Mobile stores across 5,800 towns. Goel, whose group is not into mobile telephony, has a different view. “I do not buy the 800,000-900,000 outlets story. First, these are multi-brand outlets and we could also tap them. Two, not all of these will convert. Only 25 per cent may agree to sell DTH boxes,” he says.Telecom operators claim an advantage. Arun Kapoor insists the dynamics of the two businesses are the same. “The hardware costs the same — an average of about Rs 2,500 — and the monthly bill, or the ARPU, is also about Rs 200 on an average for both the services.” Telecom operators say that capturing the market will not be too tough, what with an existing customer base of 50-75 million and counting. “We could make special offers to our existing customers and shareholders,” says Kapoor.However, not everybody agrees that telecom companies have the edge. To begin with, the phone bill in a large number of cases is paid by the subscriber’s employer. The DTH bill, on the other hand, comes from the household budget. Second, telecom companies address the individual, DTH talks to the family. “At least, we do,” says Mehra.Smita Jha, the media consultant at PricewaterhouseCoopers, points out that telecom companies do have advantages in terms of putting money upfront, managing scale and being used to long gestation periods. “Unlike the current DTH operators, they have also dealt with customers directly. MSOs, or multi-system operators, and broadcasters have no direct dealings with customers.”On paper, scale and growth statistics sound attractive. But there are several challenges, the biggest of which is content. The Indian government does not allow exclusive content on DTH or cable. Worldwide, exclusive content drives DTH platforms. Here all the platforms offer more or less the same fare.Mehra says Tata Sky is strong in applications. It offers “Active” services pertaining to religion, sports and education. “We are very big in education and our Bangalore R&D centre produces original content in science, general knowledge and mathematics, which is becoming popular in schools,” he says.If DTH has to grow, it has to meet the cable challenge. As long as cheap analogue cable is available with more or similar content, consumers will see no reason to switch. An industry expert says that if DTH has to acquire scale, the government must mandate CAS, or conditional access system, for cable, which requires a digital set-top box to receive pay channels. “If the government implements CAS, consumers will have to buy the box. DTH has a good chance of capturing the market then. What free incoming calls did to telecom, CAS could do to DTH,” he says.The biggest challenge is to make the industry profitable. The cumulative losses for the industry are over Rs 2,500 crore as the set-top boxes are heavily subsidised and the ARPUs are very low. “We are aware of the long gestation period. The trick is to quickly build scale, grab customers, and move them to a higher ARPU plan,” says Kapoor.Till then Mehra will continue his “market visits”, probably in search of that magic formula that will shorten the gestation period and ensure higher returns. Sorry, ARPUs!