Dish TV India Ltd, India’s largest direct-to-home service provider by customers, is strengthening its war chest as it prepares to acquire more customers in the next two years in India’s highly competitive DTH market. The Essel Group company today said it will raise upto $200 million (Rs940 crore) through an issue of foreign currency convertible bonds (FCCBs). This is in addition to the Rs1,100 crore it is raising in a three-part rights issue. So the company will raise about Rs2,000 crore in all.
“This money will be utilized for customer acquisition for the next two years,” Dish TV managing director Jawahar Goel told contentSutra. “After that, the company will generate enough money to fund customer acquisition,” he added. DTH companies subsidize the cost of set top boxes (STBs) so that they can acquire more customers and enjoy economies of scale.
The 2008 Ficci-PwC report on India’s media industry forecasted that DTH will reach 25 million households by 2012. Apart from Dish TV, TataSky, Airtel, Reliance Communications and Sun DTH are the other players in the segment.