The arrest of Bharat Shah, one of the main promoters of B4U, for his alleged links with the underworld, has apparently not affected the project. If the talks with the set top manufacturer fails, B4U plans to rope in a financial institution. "The fourth partner could provide financial support if there is no breakthrough with a technology company," the source said. While Europe Star is a satellite provider, Mindport is responsible for the conditional access and subscriber management system. Europe Star is an Alcatel company, a member of the Loral Global Alliance.

B4U and the other two partners made a joint presentation to Prasar Bharati. They are negotiating with Doordarshan to come in as a partner. The government regulation, however, states a sectoral cap of 20 per cent on broadcasters for a DTH service provider. "The industry is waiting for clarification on the guidelines before the DTH players finalise on their combination. But B4U is keen to have DD as a partner," the source said.

Though B4U chief executive officer Ravi Gupta refused to divulge the names, he admitted that two partners have given their in-principle nod. "We are planning to make a major foray into DTH which we will be promoting with our partners. We will make an announcement of our partners when the government comes out with its licensing system," Mr Gupta said.

B4U, in its preliminary business plan which it presented before Prasar Bharati, will initially start with a bouquet of 80 channels. The bouquet would expand to 200 channels in two years.

Europe Star, which has the Europe Star 1 satellite, is putting another satellite by the first quarter of 2002. A 100-channel operator, analysts said, would have to hire around 14-16 ku band transponders. Europe Star 1 is located at 45 degrees east and covers India with a good 53 db signal for DTH. The footprint encompasses Middle East, South East Asia, South Africa, the Indian subcontinent and Europe. "It covers all the NRI-rich areas," said the source. The B4U DTH platform will try to provide the equipment including the set top box for Rs 10,000 upfront per subscriber, the source said. Customers can also pay Rs 5,000 and the balance in installments of Rs 100 per month.

According to the preliminary plan, a fee of around Rs 300 would be charged from each subscriber. The target is to have four million subscribers in four years. The company hopes to break even within two years of operation. "With 1.5 to two million homes, the company can break even," the source said.

The investment of Rs 385 crore would be higher if there is a subsidy for the set top boxes. "The proposed investment is for non-subsidy of boxes. Investments will have to be revised upwards if that does not happen. The different platform providers have to come at a settlement as the DTH guideline mentions of the box being inter-operable. Several factors are yet to be resolved. A final business plan can be formulated only when the fine print comes from the government," said the source.

B4U and its DTH partners will have a revenue sharing arrangement with the channel owners who come on the platform. Channels will have to pay a minimum guarantee. The value-added services to be offered are Internet, teletext, pay per view, video on demand, interactive education, games for high end, telephony, online shopping and e-commerce.