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Industry thumbs up for cable network digitisation decision

The entire cable TV universe will be converted to a digital home which will reduce under-reporting and bring in transparency and boost subscription revenue

Neha Saraiya| Delhi | October 14, 2011

The acceptance by the Cabinet Committee of Economic Affairs (CCEA) of the proposal for digitisation of TV services in urban areas by 2014 has been welcomed wholeheartedly by the broadcast industry comprising broadcasters, cable operators, DTH players and distribution agencies.

Digitisation of the cable industry has been hanging fire for over a decade. Even though the television industry had a glimpse of digitisation in 2003, the primitive analog cable environment has ruled the waves giving rise to issues like non-transparency and blocking technological developments in the sector.

Gurjeev Singh, COO, MediaPro, said, “We welcome the ordinance as it is a positive move to create some level of infrastructure required in the cable and broadcasting space.  It was really required at this point of time, as with the availability of over 500 channels, we were just able to give 100-odd channels. Also, it’s not just about the number of channels but also the digital quality that needed to be delivered to the audiences.”

Post digitisation, cable operators and well as DTH players will be able to monetise their services efficiently.  Calling this a revolutionary move for the cable industry, Sudhir Agarwal, CEO, Wire & Wireless (India) Limited, commented, “The entire cable TV universe will be converted to a digital home which will reduce underreporting and bring in transparency, resulting in a boost to subscription revenue. Digitisation of existing cable infrastructure will augment the channel carrying capacity, offer better quality and provide further scope for delivering various VAS such as MOD, broadband, etc., to consumers. A multi-fold increase in subscriber numbers is expected. Such exponential growth in subscriber numbers requires huge infrastructure to serve them, and WWIL is well positioned to do so.”

Besides addressing the issue of ‘under-declaration’ in the cable industry, the step will also trigger subscription revenue for broadcasters, putting an end to the heavy carriage fee (20-50 percent of all operational cost), paid to cable TV operators.

Tarun Katial, CEO, Reliance Broadcast Network, observed, “Digitisation brings in fair reporting of subscriber base, leading to standard pricing, and will help do away with local monopoly.  Digitisation will also increase the subscription revenue for operators and reduce the carriage fee for broadcasters in a phased manner and should help margins in the long term. Current capacity constraints in analog cable have led to stifling the growth of new channels and introduction of technologically advanced content. The increased capacity of digital distribution will drive greater investments by broadcasters toward focused, targeted and HD content.”

Katial added, “The carriage costs paid by broadcasters which currently remain high in view of the limited bandwidth of analog cable would decrease post digitisation. This would allow broadcasters to make higher investments in programming and marketing, thus improving the customer experience.”

For the DTH (direct to home) players, digitisation of cable TV networks will create a level playing field because of the huge competition in the segment and DTH companies operating at ARPU levels of just Rs 45-50 only.

Harit Nagpal, CEO, Tata Sky, explained, “Digitisation of Indian TV services will aid the organisation of the industry and result in clearer subscription figures for broadcasters. We would like to see digitisation within the said timeframe and feel that the acceptance of TRAI’s recommendations on short-term taxation relief for DTH operators would immensely boost this process.”

Salil Kapoor, COO, Dish TV India, echoed the same sentiment, saying, “DTH has strongly emerged as the platform of choice across all population and socio-economic strata. This is visible in the scorching rate of growth the industry has witnessed in the past. Therefore, this ordinance will certainly help the DTH industry much more than other forms of distribution. DTH companies have also clearly demonstrated their capability in faster ramp-up even in remote upcountry areas; so shorter deadlines will not be a problem.”

From the consumer’s point of view, the digitization of television feed is set to bring a huge, qualitative improvement in the service and range of content on offer. But, as of now, in order to fully shift out of analog in the four metros by March 31, 2012, there will be a requirement of around 9 million set-top boxes.

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