Cable TV

With broadcaster backing, MSOs eye voluntary digitisation

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MUMBAI: When the industry was moving in full force towards digitising phase III and phase IV cities, the Information and Broadcasting Ministry announced the postponement of digitisation till 2016. The news may have elated a few, but multi system operators (MSOs) and broadcasters have been critising the move. 

"It is the MSOs who have to invest in digitisation," says Siti Cable CEO VD Wadhwa and president of the newly formed All India Digital Cable Federation (AIDFC). In such a scenario, Wadhwa has suggested voluntary digitisation in these phases.



The MSOs have a feeling that with delayed digitisation, the local cable operator (LCO) will not pay them the incremental money, since digitisation is not taking place.

 

With delayed digitisation, broadcasters who were looking for a hike in their subscription revenue from the phase III and phase IV markets will also have to put a break to their dreams. 



The MSO too is at loss. Currently, an MSO invests close to Rs 1500 per set top box and additional money on connectivity. "With this delay, the MSOs are not going to get any return on their investments for the next 15 months.  So whether I pay today or after 15 months, my interest cost will keep getting high, since I will be borrowing money and then investing," informs Wadhwa.



To tackle this situation, Wadhwa suggests that since the industry has to in any case move to digitisation in the next two years, they can start with voluntary digitisation.  "Broadcasters will have to back the MSOs to achieve this," he says adding that Siti Cable is ready for voluntary digitisation, provided that broadcasters do not charge the MSO for the next 15 months.



"Since the MSO is bringing in the money, the broadcasters should agree to not charge for next 15 months," he says.



Wadhwa also suggests that voluntary digitisation can be smooth provided the LCOs increase the cable bill in phase III and IV markets by Rs 50-Rs 60. "LCOs have till today been charging only Rs 150-Rs 180 from the consumer for some 60 channels. I would suggest that since with digitisation the number of channels will go up to 200-250, the LCOs should increase the bill by Rs 50-60 per subscriber."



Wadhwa is of the view that the LCOs can keep 50 per cent of the amount they increase in the cable bill. "With this, till digitisation is complete, while the ARPU for the MSO increases, the LCO can also get 50 per cent more on what he is currently getting," he opines.

In order to make this possible, Wadhwa will first try to bring consensus amongst MSOs and then will talk to all the broadcasters. "If the broadcasters support us, we will go ahead with voluntary digitisation.  We will also go to each state and talk to the LCOs," he concludes. 

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