CUSTOMER PERCEPTION TOWARDS VARIOUS DTH SERVICE PROVIDERS

GITAM SCHOOL OF INTERNATIONAL BUSINESS

PROJECT REPORT ON CUSTOMER PERCEPTION TOWARDS VARIOUS DTH SERVICE PROVIDERS

Submitted by: R.Shiva Shankar (1226112243)

1

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

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SUMMARY: 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.

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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 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.

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QUESTINNAIRE: 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

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issued the guidelines for operating DTH. Country’s first DTH license was awarded to Dish TV in 2003 which started operations in 2004. 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 payTV. 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 6

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 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. 7

Analysis of the Indian DTH industry: 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 8

investments which does not outweigh the benefits. The transmission was done originally in 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. Bartlett's Test of Sphericity

.740

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 Initial Eigenvalues

Compo nent

Total

% of Variance

Rotation Sums of Squared Loadings

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 Matrix

a

Component 1

2

3

PictureQuality ChannelPackaging

.681 .745

ServiceDisturbtion

.827

ExtraService

.766

QuickService

.766

OnlinePayment

.572

Facilities

.545 .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 Asymp. Sig. (2Value Pearson Chi-Square Likelihood Ratio Linear-by-Linear Association N of Valid Cases

Df

sided)

a

8

.068

11.928

8

.154

2.537

1

.111

14.594

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 Asymp. Sig. (2Value

Df

sided)

a

4

.199

6.019

4

.198

Linear-by-Linear Association

.141

1

.707

N of Valid Cases

100

Pearson Chi-Square Likelihood Ratio

6.002

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 D2H b) TATA SKY e) Reliance Big TV c) 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 b) Extra services

c) Affordable Tariffs d) Better Quality

e) Good Reputation 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

Price Channel Package Picture Quality Ease of Purchase Ease of Payment Quality of Service 18

Average

Not Satisfactory

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

9) What is your salary package per month? a) Below 15,000

b) Between 15 to 30,000

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c) Above 30,000

d) Above 50