Direct to home cheaper than cable operators

Direct to home cheaper than cable operators

                                                                                                                       

Everyone one of us likes a discount on everything that we purchase. It is natural for us to go for the cheapest price as long as the quality is not compromised. Conventional wisdom tells us transaction costs on any product and service goes up with the addition of intermediaries. There are several examples to relate to, such as buying vegetables from the mandi or wholesale market. Most often we are unable to enjoy the benefits of such savings because of inaccessibility of the product or service. That is not the case with the digitisation of the cable-TV sector. With the implementation of digitisation, one need not go looking for a service provider as the direct to home (DTH) service providers facilitate television broadcast direct to your house.

 

While cable operators and multi-system operators (MSOs) exist, and provide for digital content; they are the intermediaries in the chain. As with every intermediary, they add to the cost of the product, and in this case the service on offer. With the digitisation of television broadcast and regulations in place, the ground rules have changed. Unlike the past, all forms of operators, bet it cable, DTH or MSO, are now on the same level. In this scenario quality of broadcast and service will be the key. So, will be the cost. DTH players score over MSOs as they have the advantage of experience and costs.

 

 As the phase 2 of digitisation is in place, expectedly there is a lot of buzz in the market and every player is pitching on the price at which they are offering their service. For every discerning consumer the situation is similar to the problems that arise when flooded with choice. In this state of problem of plenty, price conscious amongst will be heavily swayed by claims on low cost and best quality offering. Here in lies the trap. With everything else being the same, price is the deciding factor when making a choice. However, the pricing offered by MSOs cannot be equated to that by DTH players.

 

The reason for such an anomaly arises from the prevalent tax structures in place--entertainment tax and service tax. Almost all MSOs advertise their base pack price without including these two taxes, DTH prices always include what a customer will pay eventually inclusive of taxes. DTH, is thus not only affordable, it is a much better proposition compared to MSOs. Moreover, unlike MSOs who charge entertainment tax and service tax, the DTH player absorbs the entertainment tax and charges consumers only the mandated 12.36 per cent service tax.

 

 So, people in Indore, will be charged 20 per cent entertainment tax and 12.36 per cent service tax by MSOs on the advertised base price, whereas DTH will charge only the 12.36 per cent service tax. As a customer, you stand to gain with a DTH, because of several other factors such as portability as well as a higher number of channels on offering in the base pack offered. Moreover, there are many channels that are currently available only on the DTH platform. With digitisation, viewers will be able to enjoy high-quality DTH services with good clarity and sound. As the industry goes through this transition phases, as an astute consumer, make sure you get the bang for your buck rather than be swayed by claims of being low costs, which are untrue and mis-leading.

 

 

 

 

 

For further information, please contact:

Atul Malikram

9827092823