MUMBAI: Zee Telefilms Ltd (ZTL) plans to invest Rs 1 billion in its wholly owned subsidiary Siticable over the next one year to further expand its direct-to-home (DTH) distribution network.

A small portion of the amount will also be spent on upgradation of Siticable's cable network. This is in addition to Rs 1.5 billion already invested in 2004. Before that, Zee had pumped in Rs 2 billion for its DTH project.

"Zee has already invested Rs 1.5 billion in Siticable this year. The plan is to put in another Rs 1 billion by December 2005," says Essel Group chief executive officer of corporate strategy and finance Rajiv Garg.

The investment of Rs 2.5 billion since 2004 is being mainly met from the proceeds of the $100 million foreign currency convertible bond Zee raised early this year, says Garg. Further fund requirement will be spent from internal accruals.

Siticable is creating the infrastructure for the DTH operations including billing, subscriber management system services, marketing, call centre operations and expenses towards creating a dealer network. ASC Enterprises, part of the Essel Group, has the licence to provide DTH service and operates it under the Dish TV brand.

Dish TV has 160,000 subscribers and is offering 100 channels. "We are adding 20,000-25,000 subscribers a month. Our aim is to increase our offerings to 144 channels by December 2005," says Garg.

Will the entry of Doordarshan's DTH service with a free bouquet of channels affect Dish TV's growth? "DD will have a limited offering, with the mainline channels not in the menu. DTH will take off in a big way when conditional access system (CAS) is operational in cable TV. That is when consumers will have to buy a set-top box. This will make them decide which service to take," says Garg.

What is Dish TV's target? "We aim to reach one million subscribers by 2005-end. We will achieve a break-even situation when we reach one million DTH subscribers," says Garg.