India's largest direct-to-home (DTH) operator Dish TV may source domestic set-top boxes (STBs) to offset rising costs associated with the weakening rupee.
With the overseas component costs needed to receive digital television channels spiralling, Indian pay-TV operators are exploring various options to minimise the impact on their business models – which already include a hefty consumer subsidy for STB purchase.
Jawahr Goel, managing director, Dish TV India, said his company has "been considering options with our overseas suppliers to commence production at a base in India" while "evaluating possibilities for improvement in hardware economics of consumer premises equipment sourced from India," according to DNAIndia.com.
In July, Dish TV increased the price of its STBs by INR250 due to the escalation in hardware costs. Dish TV's standard definition STB now costs INR2,249, while its Dish + recorder costs INR2,349. The price of its high definition STBs has remained unchanged.
The move was followed by price increases from Dish's DTH rivals Tata Sky, Airtel Digital, and Reliance Digital, who also reacted to the depreciation of the rupee by 8-10%.
Videocon d2h manufacturers its own boxes domestically, however the adverse impact of currency fluctuations affect the cost of its imported components. "The further depreciation of 8-10% in rupee is a cause for concern and we are studying the impact of the same," Anil Khera, CEO, Videocon d2h, told The Hindu in July.
In addition to Videocon Industries, Noida-based Dixon Technologies and Kortek Electronics manufacture STBs within India. International companies are also considering partnerships with domestic manufacturers to produce STBs in India. In June, the Russian-owned Exset told PTI it was in discussion with two Indian companies to manufacture boxes to support digital monetisation systems for digital TV transmission.
Customs duty on imported STBs has risen from 5% to 10% in this year's Union budget, causing a further incentive for Indian manufacturers to increase domestic production.
"We have a hunch that in the near future there can be a higher duty on import, because of the balance of payment issues. In fact, we have already alerted our vendors to set up shop, to convert and produce the STBs locally," Goel told DNAIndia.com.
Dish TV has enough STBs to last for three to four months, by which time the company expects vendors to be producing them in India, he added.