That was nearly seven years after Star TV had made an aborted attempt to bring in the new technology taking advantage of the fact that the sector was totally unregulated.
But the government, confronted with growing concerns that it could lead to a security breach (just like in telecom) and cultural invasion of the West, decided to do the easiest thing: ban DTH.
Understandably, when Dish TV launched its services, in a market dominated by cable operators, it decided to move cautiously.
The strategy was to not to concentrate on metros and large cities, where cable reigned supreme, and instead go to remote areas and rural markets where laying cable was not viable and consumers were starved for good content.
It entered the market with limited programming: essentially the Zee bouquet and a few other channels.
The action shifted to the urban markets when Tata Sky, which stared service in 2006, chose to target the subscribers who were unhappy with analog cable.
“In 2006, when we started, we were clear that our target will be the urban markets which were looking for good-quality viewing and customised choice of the programmes, and were ready to pay a bit of premium (analog cable did not provide them this) for it,” says Harit Nagpal, CEO of Tata Sky.
Ten years after Dish TV’s entry, DTH has become a force to reckon with.
With over 40 million active subscribers (as of March 2013), it has grown tenfold from just 4 million customers six years ago.
And it is no longer a rural phenomenon: 60 per cent of its subscribers are in the country’s top 20 cities. Its share of the total satellite (cable and DTH) homes has gone up from 23 per cent in 2009-10 to 30 per cent now.
Industry analysts say that by 2017-18, it will control over 36 per cent of the total subscriber base.
That is why private equity funds like India Opportunities Fund (which has invested in Tata Sky) and a whole host of others like KKR and Bain Capital (it is in talks with Airtel DTH) are keen to invest in the sector.
The reasonwhy they are bullish is that DTH is adding over 8.5 million subscribers a year, while cable is growing at a fourth of that number.
The phenomenal growth is backed by huge investments: the seven DTH operators have together put in over $4 billion to make it happen.
So, what explains the magic of DTH? Obviously, the key is its high-quality signal, especially for those consumers who were used to analog TV.
Also, it has provided customers the choice to see what they want rather than being at the mercy of the cable operator.
Faltering start
Yet, there were initial glitches. Dish TV and Tata Sky, the two rivals, were locked in a bitter courtroom battle over their refusal to provide their content (Zee and Star bouquets, respectively) to the rival platform which limited the choice for customers.
However, DTH got a huge boost in 2008 when four new players -- Sun, Airtel, Reliance and Videocon -- entered the market and the issue of content got resolved.
The boost it gave was reflected in the heady growth of DTH subscribers: up a staggering four to five times in the four years between 2007 and 2011.
The DTH phenomenon has been good news for broadcasters.
They had alleged that cable operators were deliberately under-reporting their subscriber numbers, which helped them pocket a large chunk of the subscription money.
This hurt all the more, the broadcasters said, as they were spending more and more on content.
This problem was addressed by DTH -- there is no scope for under-reporting subscriber numbers here.
Thus, DTH operators contributed over Rs 2,500 crore (Rs 25 billion) as subscription revenues to broadcasters in 2012-13, which is 51 per cent of what they got from cable and DTH households put together.
Yet, their share of the total subscriber base is only 30 per cent.
What it means is that broadcasters get virtually more than double from each DTH subscriber in comparison to a cable subscriber.
Going forward, analysts say, with over 70-80 million non-TV households, rural India holds great possibilities for DTH.
Says Salil Kapoor, COO of Dish TV: “For us, 50 per cent of the subscribers are in rural markets and we expect this to go up once digitisation of cable happens (across the country, as mandated by the government).”
Some people feel that the digitisation drive could actually halt DTH’s