(Financial Express via NewsEdge) When GSLV-F02, the Indian rocket carrying the INSAT 4C satellite, burst into flames and splashed into the Bay of Bengal, along with it went down plans of some of the country's major television and communication companies.
While the failure of the launch is estimated to cost the Indian Space Research Organization a little over Rs 250 crore ($53.6 million), networks such as Sun Network, CNBC TV 18 and Times Now will find it difficult to measure the opportunity loss and cost of delays.
The launch may delay Sun chairman and managing director Kalanithi Maran's DTH television services plans. The others may find their digital news gathering efforts, crucial for running competitive media networks, hampered.
A dozen Ku-band transponders were built into the INSAT 4C, seven of which were booked by Sun for its DTH services and digital news reporting on its channels. The remaining five Ku-band transponders were to be used in digital newsgathering services and VSAT operations of companies such as CNBC-TV 18, Times Now, Kairali Television, National Informatics Centre and Videsh Sanchar Nigam Ltd. Rupavahini. The Sri Lankan public broadcaster had also booked a slot on INSAT 4C.
While all have their plans stalled, the launch failure is a bigger blow for Sun than others like news broadcasters Times Now and CNBC TV18. The two already use transponders on satellites like INSAT 3B and INSAT 4A.
Times Now has been using space on INSAT 3B. While it would have transferred to INSAT 4C after the launch, the failure doesn't affect the company at all. CNBC TV18, on the other hand, uses space on other satellites, including the Netherlands' NSS-6.
But the launch of INSAT 4C was critical to Sun's growth strategy.
Maran is adopting a wait-and-see strategy.
"ISRO assured us that we will be given alternate transponders. The details will be known in the next few days," he said, adding that Sun's DTH services were on schedule to operating by year's end.
Sun has some other launch options as well. It has a joint venture agreement with Malaysian media company Astro All Asia Network, reportedly worth $25 million, for content, distribution and marketing. Astro also has a 20-year exclusive license for DTH services in Malaysia.
"Sun Network can book transponders on Measat-3, a Malaysian satellite scheduled for lift-off in September in Kazakhstan,'" a senior industry insider said.
Another option for Sun is to access transponder capacity that ISRO leases from foreign satellites. ISRO has earlier leased space for Dish TV on NSS-6 and bought transponder space on an Arabsat satellite when INSAT 2D failed in October 1997. It has also provided temporary leases on Thaicom from 1998 until INSAT 3E's launch in September 2003 and on US satellite GE-Americom.
ISRO had given assurance that all those who had booked space on INSAT 4C would be given space on other options.
ISRO has space available on other satellites, according to chairman G Madhavan Nair, or will accommodate players on INSAT 4B, which is scheduled for a February launch from French Guyana.
Operators are gung-ho about DTH for a number of reasons.
"By being able to charge customers directly, the broadcasters can easily expect their subscription revenues to almost double," says ICRA analyst Vineet Nigam.
Sun's DTH rivals are pulling ahead and evidence can be found in rival DTH operator Dish TV's numbers. The Zee Television-company has close to one million subscribers at the end of fiscal 2006 and is targeting revenue of Rs 320 crore ($68.6 million) for the current fiscal year on a subscriber base of 2.4 million.
The turnover is expected to touch Rs 800 crore ($171.5 million) as subscriber numbers rise to 3.15 million in fiscal 2008. More than a third of Dish TV's customers are from homes out of the reach of cable networks and small towns.
DD Direct Plus has already penetrated 4.6 million homes while Tata Sky, a joint venture between Tata and Rupert Murdoch's Star Television, has regulatory approvals in place. It is expected to launch operations by year's end using transponders booked aboard the INSAT 4A.
Anil Ambani-led Blue Magic is another DTH operator waiting in the wings for government clearance.
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