Space TV, the direct-to-home broadcasting services joint venture between Tata Sons and Rupert Murdoch's Star group, will invest about Rs 1,600 crore (Rs 16 billion) in the project.

According to a presentation made by senior executives from the two companies to senior government officials in Delhi on Friday, the ambitious project will be kicked off around Diwali (October-November) this year.

The Rs 1,600 crore investment will go towards setting up the infrastructure for the project, working out distribution network as well as entering into marketing as well as other tie ups in India.

The set-top boxes needed for DTH transmission will be priced under Rs 3,000 by the Star-Tata joint venture, which is also examining the option of offering financing schemes to consumers for purchasing these boxes. As per the company's projections, the initial cost of the service for a household will be around Rs 5,000.

The company is expected to offer 65 channels to begin with besides niche channels such as lifestyle, cookery and gardening. The monthly billing for the service will range from Rs 160 to Rs 300. It is in talks with various broadcasters to bring them on to the Space TV platform.

Meanwhile, Star Group chief officer (CEO) Michelle Guthrie and Star India CEO Peter Mukherjea met information and broadcasting minister Ravi Shanker Prasad and I&B secretary Pawan Chopra and briefed them about the project.

According to sources, the Star executives also petitioned government for an early clearance of its DTH venture. The company in the first year operation is expecting about one million subscribers and expects the number to go up to about 10 million in seven to eight years.

Space TV also expects that once the number of subscribers picks up, some Indian companies may come forward to manufacture set-top boxes locally.

As per the plans of the company, the services will not only be available in the metros, but also in smaller cities and other state capitals.

At present, Space TV had paid the Rs 10 crore (Rs 100 million) entry fee but still has to furnish Rs 40 crore (Rs 400 million) guarantee before it can get a letter of intent from the government to begin DTH services.

After Zee, Star will be the second private player to enter DTH services. State-owned Prasar Bharati's DTH service is likely to take off in the next couple of months.