Direct to Home ( DTH) operators in Tamil Nadu will feel the heat because of the state government's decision to impose a 30% entertainment tax on DTH connections. Industry sources said the move would hurt Sun Direct maximum as it is the largest DTH operator in the state. The tax has been imposed to preempt people from migrating from Arasu Cable TV to DTH, they said.

Sun Direct, with 17.5 lakh connections, controls 80% to 85 % of the DTH subscriber base in Tamil Nadu. The balance is shared by other operators like Airtel, Videocon, Tata Sky and Dish TV.

"The state government is targeting us by imposing 30% tax on DTH operators. It will also hit the DTH consumers badly because we have to collect at least a part of the tax from our subscribers. We have no other alternative," a senior executive with a DTH operator said. He also said that they planned to go to court against the heavy tax imposition.

There are reports that DTH subscriber base had been fast picking up in the state in the past two weeks as people who were upset with Arasu Cable TV were shifting to DTH. "I market all brands of DTH. We used to give 50 new DTH connections per week till last month. But after the Arasu cable started operation, our sales have shot up to 50 connections a day. People are not happy with the Arasu Cable as it does not offer any pay channel. The quality of transmission is also poor. People are ready to pay more to see quality transmission," K Sivakumar, a shop owner in Tiruvannamalai said.

A marketing head in a DTH firm said, "Earlier, the market share of DTH was 20 to 25% of the total television viewers. In the past two weeks, it has touched 30%. DTH sales is maximum in Nilgiris, Coimbatore, Erode, Salem, Karur, Dindigul, Tanjavur and Tiruvannamalai districts as Arasu has started operations in these places."

The youth demand better quality. An engineering college student, T Vijayasarathy from Tanjavur, said "We used to watch some good English movies. After the launch of Arasu Cable TV, we are forced to watch boring channels and programmes. More importantly, we were not able to watch cricket matches. We have decided to shift to DTH. The tariff is high, but we have no other alternative."

A cable operator G Sridhar said, "People are in an agitating mood. They refuse to pay the subscription fees as we are not able to provide the channels they need. We are in a dilemma whether to continue with Arasu or not."

DTH operators have been charging Rs 115 to Rs 130 per month for the basic package. They charge Rs 250 to Rs 300 per month for premium packages which include sports and movie pay channels. Due to E-tax, the monthly tariff will increase to Rs 400.