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India’s two major satellite TV operators, Reliance Digital TV and Sun Direct TV are set to merge in near future according to sources. 

In India, DTH market is the second largest pay TV market after cable TV. Cable TV is currently offering mostly basic offerings since only around 12% of the cable TV customers are on digital platform.At the end of June 2013, total number of satellite TV subscribers was around 59 million. Dish TV is the market leader having 27% market share followed by Tata Sky and Sun Direct TV with market share 17% and 15% respectively. Reliance Digital is the smallest player with around 8% market share. 

Reliance Digital TV has been slow in net customer addition, with only 7% increment in pay TV subscriber base in one year period while Sun Direct TV customer base has increased 13% over the same period. In addition, Reliance Communication is in debt of INR 385 billion as of June 2013. These might be some of the reasons why Reliance Digital TV plans to merge with Sun Direct.   

The merger of Reliance Digital TV and Sun Direct will enable the company to become the second largest DTH player in Indian market overtaking Tata Sky. Southern market player Sun Direct TV will also get a chance to expend their coverage to other regions. The merging could strengthen the company’s DTH business by improving market share, expending the coverage and managing operating cost better.