Industry sources said KU-band transponders are now available on lease as cheap as $2-2.50 million per annum, a drop of nearly 50 per cent over the prices prevalent last year.

The capacity available in the satellite market is many times more than the current demand, industry sources said. Among the satellite companies which have KU-band transponders available include Singapore Telecom, Thaicom, PanAm Satellite and AsiaSat.

Most of the satellite companies present in the Asian market had pinned their hopes on opening up of KU-band DTH broadcasting in India. However, with the government not taking any decision on this issue, there is overcapacity of KU-band transponders in the market.

"Some companies have entered into long-lease agreements at prices much lower than last year," a seniorofficial of a satellite television company said. STAR TV is believed to have hired transponders on AsiaSat-3, one of the sought after satellites, for around $2.5 million per transponder per annum which is lower than $3 million per transponder paid by it for AsiaSat-1.

Industry sources said AsiaSat-3 is a hot favourite since all STAR channels have shifted to it. Zee is also expected to shift all its channels except Zee TV to AsiaSat-3 following its decision to go in for digitisation.

But there are satellites such as Apstar which are available lower than $2.5 million. Sony's AXN channel and some regional channels are being beamed on Apstar which is not a hot property with satellite television broadcasters as cable operators have to instal a separate dish to catch its signals.

Sources said STAR TV's decision to go in for termination of its Ku-band transponders lease agreement with PanAm Satellite and pay penalty for premature closure of the contract was taken in view of the falling lease prices. STAR waspaying over $20 million for seven transponders.

STAR now plans to hire Ku-band transponder only after the Indian government takes a final decision to open up DTH broadcasting, sources said. STAR had taken the lead to venture into DTH broadcasting in the country. It recruited over 150 people and splashed full-page advertisements in leading national dailies announcing its entry into DTH broadcasting.

The plans, however, ran into trouble when the then information and broadcasting minister S Jaipal Reddy put his foot down and refused to open up Ku-band DTH broadcasting. Subsequently, the BJP government set up a group of ministers about five months ago under home minister LK Advani to look into the policy on DTH broadcasting. The group's decision is still awaited.