"Already around 3,000 DTH equipments have been seized in Lahore and Islamabad but the major illegal connections are in Karachi," Fakharuddin Mughal, a spokesperson of Pakistan Electronic Media Regulation Authority (PEMRA) said.
The crackdown comes as PEMRA is preparing to award official DTH licences to Pakistani investors next month.
"This illegal business is worth around $150 million (roughly Rs. 998 crores) annually. Approximately this amount is earned by Indian DTH services and their agents in Pakistan annually from our market," Mughal told PTI.
"The money was moved illegally from Pakistan to Dubai as license and subscription fees by the agents/operators in the country who illegally market and sell Indian DTH services like Tata Sky, Sun Direct, Reliance, Videocon, Dish TV etc," PEMRA's Director General Licensing Wakeel Khan said.
"According to a rough estimate there are around one million to 2.5 million users of illegal Indian DTH services in Pakistan most of them concentrated in the big cities like Karachi, Lahore and Islamabad," Wakeel said.
The penetration of Indian DTH services is said to be more since cable operators also rely on DTH's to show channels like Star Sports, Star Movies and National Geographic, which have not yet received the nod from PEMRA.
Wakeel said Pakistani dealers, working on behalf of Indian DTH companies smuggle DTH dish and set-top box from Dubai, which involves a one-time cost of around Rs. 10,000 to 15,000 which the customer pays.
Monthly subscription fees for the DTH services range from Rs. 1200 to Rs. 1800 per month. The illegal Direct-to-Home service has become popular in Pakistan according to analysts since they show high quality digital content and normally have a range of 300 to 400 channels to choose most of them in Hindi-language content.
Wakeel said that PEMRA had also requested the help of Customs Intelligence, Federal Investigation Agency (FIA) and other agencies to curb this illegal business as it was difficult to trace down the equipment to private homes.
"We can target cable operators and the agents but it is difficult to go to every home. That's where (Pakistan) Customs intelligence, FIA and other agencies have a role to play," Mugal said.
He said none of the dealers smuggling in DTH dishes and set boxes and offering services had registered offices and they used websites to market their products or welcomed walk in customers.
PEMRA is scheduled to auction three DTH licenses on December 7 for which 10 investors have submitted their documents. It presently has given landing rights to only 19 foreign channels while they are around 86 Pakistani satellite channels operating in the country.