DishTV, a prominent direct-to-home company, has announces a price hike of Rs 100 across its Set Top Boxes (STBs) with immediate effect.

The hike was considered a necessary step due to an increase in customs duty on the import of STBs from zero to 5 per cent.

It should be noted that the central government has recently imposed a 5 percent customs duty on STBs in the union budget for 2009-10.

Under the latest amendments, a Dishtv bare Set Top Box would now cost Rs 1,590 as compared to the earlier price of Rs 1,490.

Talking to our correspondent, Dishtv CEO, Salil Kapoor, said that the business model of DTH is based on subsidy and the component cost has also gone up considerably due to the rise in dollar exchange rate in the last one year.

The company has tried to minimize the effect on consumers by absorbing these rising input costs over the year, but the trend is of a constant rise has reached to a such level, where absorbing the entire cost internally seems to be a tough proposition for the company.

Shares of Dish TV declined Rs 2.15, or 5.64%, to settle at Rs 40.30. The total volume of shares traded was 7,983,109 at the BSE (Monday).