Cable TV

Digitisation extension 2015: MSOs, LMOs smile; broadcasters sigh

MUMBAI: It was a decision that most had been anticipating would be taken. But when it did come, it came as a bolt from the blue. Four months before cable TV digitisation had to be completed pan India, the government - through information and broadcasting (I&B) secretary Bimal Julka - announced to industry via indiantelevision.com that a decision had been taken to extend it to December 2015.

 

(While this is what Julka has told us, certain sections in the industry have suggested that end-2015 is the analogue sunset date for phase III towns and villages; the date for phase IV regions may end up being December 2016.)

 

Earlier this year, the previous UPA government’s Information and Broadcasting (I&B) Minister Manish Tewari had held a task force meet with all the stakeholders to state that digitisation was to go on as planned with phases III and IV being merged. The deadline was December 2014 to implement digitisation in digital addressable system (DAS) phase III and IV while simultaneously implementing billing in phase I and II, which was to have been done much earlier.

 

However, the new advancement of the deadline by the current BJP government, comes across as a breather to the beleaguered and unprepared  cable TV industry that claims to be facing a shortage of funds to execute the seeding of 75 million boxes.

 

The MSO and LCO fraternity is heaving a sigh of relief following the extension. Says Den Networks CEO SN Sharma: “After long, the government’s commitment is visible and there is clarity of date. For phase I and II we had built the tempo and campaign well in time and now with this announcement, things for phase III and IV will also fall in place. The government is also keen to push indigenous production of set top boxes which will bring out a 15 per cent reduction in prices. These next two phases constitute about 70 per cent of the cable TV base. We are now waiting for STB producers to tell us they can deliver the demand."

 

The new I&B Minister Prakash Javadekar has time and again reiterated the government's intention to give a fillip to indigenously produced STBs.

 

LCOs seem to be a happy lot. Says Maharashtra Cable Operators Foundation (MCOF) president Arvind Prabhoo, “This gives time for the last mile operator (LMO) to plan for a year and execute it as mandated by the Telecom Regulatory Authority of India. Our association will educate LMOs about the benefits of digitisation. We will be able to rope in more investors and manufacturers to come up with schemes for executing voluntary digitisation.”

 

Digitisation in DAS I and II areas has also not yet been implemented in the way as had been envisaged. Billing and conditional access systems (CAS) have yet to take off in several DAS I and II towns.

 

IMCL managing director and group CEO Tony D’silva feels that the extension does not make much of a difference if the government’s resolve is not strong enough. “Just by postponing or sticking to a date does not change the speed of digitisation. It has to be a much more detailed and flushed out action plan on how the MSO, LCO, broadcaster and the government will be brought together. It is great that they have clarified their position, now there needs to be an actionable plan by putting together a core committee,” he opines.

 

However, the most unhappy of the lot are the broadcasters because it delays their dreams of getting higher subscription revenues from MSO, cable ops, and the subscriber by a year. Most feel that the one year delay will lead to everyone in the ecosystem slackening the pace, with delays hitting the process and spread of digitisation once again.

 

Colors CEO Raj Nayak is of a similar opinion. Says he, "We were really looking forward to phase III and IV to be completed by December as after much delay and deliberation the sunset date was arrived at. Our business plans were geared accordingly. I am sure there must have been a good reason to postpone and a three month extension would have been understood, but postponement by one whole year is slightly disappointing.

 

“Having said this we are glad that the digitisation process is on track and looking at it through a positive lens I am sure this would give the industry an opportunity to learn from the mistakes of phase I and II and hopefully put better systems and processes in place so that the respective stakeholders including the broadcasters get our fair share.”

 

News broadcasters are most pained by the excessive carriage fees that are being demanded of them, even as revenues continue to sag. News Broadcasters Association president and NDTV executive vice chairperson KVL Narayan Rao is disappointed with the extension. “Complete digitisation will bring transparency to TV broadcast distribution while delays will only affect that goal,” he states.

 

Various reports predict different dates of completion of digitisation in India. Amongst the most recent ones brought out by Singapore-based Media Partners Asia (Indiantelevision.com's partner for the annual pay TV gathering India Digital Operators Summit)  has stated that by 2017 only 70 per cent of the pay TV market in India will be digitised. 

 

We, at indiantelevision.com, believe there are several other measures that could be put in place by the government (read I&B ministry), the regulator, and the industry:

 

*For starters, changing the mindset of the cable TV ecosystem that digitisation and true pay TV is useful to all those in it, and not harmful, needs to be communicated effectively.

 

*Second, the government could set up a digitisation transition fund, which helps educate, train and provide seed capital to and rewards cable TV operators who walk that path.

 

* Third, it puts in place policing and penalising measures to cane those who don't.

 

*Fourth, they need to ensure that valid and correct subscriber information is collected by every cable TV operator or MSO and recorded in their SMS and possibly made available to the authorities.

 

* Fifth, once this is done, ensure that a legitimate bill is issued to every subscriber.

 

* Sixth, the ministry, the TRAI and the government could announce future-proof (at least for a three to four year period) technical specifications and standards for set top boxes, so that garbage zapper boxes are not dumped on India and on an unknowing and unsuspecting home viewer.

 

* Seventh, leave pricing to the market place, rather than mandating 10-15 per cent price increases. Sure broadcasters want to increase subscription revenues, but they would not be so foolish so as to price their channels so high that they drive away consumers, and in the process their collections. Some might choose to have stiff price tags, but their business plans, obviously, will have factored that in, to have a smaller niche subscriber base. Does the government mandate how much a pair of Armani jeans can be priced at?

 

* Let cable TV operators be drawn in to deliver broadband - provide them technology, assistance, funding - so that they can be one of the constituents who will help fulfil the Modi government's grand plan to digitise the country.



While there are many other measures that could be drawn up and while some may not approve of what we have prescribed, we have decided to stick our necks out and made some suggestions. We would love to hear different perspectives from our readers. Please feel free to let us and others in the industry know by posting your comments below.

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