Entering a new phase of television history amid chaos

MUMBAI: Two High Court verdicts in different directions, political oppositions, a disgruntled set of local cable operators (LCOs) and a few unstitched deals between broadcasters and multi-system operators (MSOs). That is how India is going to march into a new phase of television history on 1 November as consumers in Delhi, Mumbai and Kolkata get to watch their popular shows only through a digital set-top box (STB).

Chennai gets excluded due to a court verdict that will hear once again on 5 November while the rest of the country waits for its turn to welcome or oppose the entry of the digital box. Under a government mandate, cable TV networks have to go digital across India by 31 December 2014.

India has historically learnt to change amid chaos and confusion. The cable TV world is no different. Consumers with STBs installed in their homes do not know what pack of channels they will get at what price, LCOs are wanting to push digitisation to a future date of history and a few MSOs are still waiting for the STBs to arrive from foreign land. Add to this the government‘s high figures on digitisation, which are believed in private by very few in the industry and hotly contested by the cable operators, and you realise how hard it is to fix the ground situation.

The consumers, used to low monthly cable TV subscription bills, had not called for this overhaul. A personal bond had developed with the local cable operator, strengthened by a commercial gain of not having to pay more for watching more channels that have progressively launched over the years.

Many TV viewers also fear that they will have to pay more subscription fees in the new era, driven by entertainment and service taxes that can no longer be masked by cable operators and an agenda by the MSOs and broadcasters to lift ARPUs (average revenue per user). In an interview with, Zee Entertainment Enterprises Ltd MD & CEO Punit Goenka had said that the industry couldn‘t survive on ARPUs of Rs 180.

There is space for opposition parties to make political hay out of digitisation. In Mumbai, the Shiv Sena realises that a political vote bank is up for grabs and is, thus, keen to extend support to the local cable operators who have much to lose in this new era of TV signal transmission through a digital addressable system. The operators have been pocketing a bulk of the subscription revenues that cable TV consumers have been paying due to lack of transparency as television signals into homes have been mostly analogue. The MSOs, who have been investing in the cable networks, and the broadcasters have no means available to measure their actual subscriber base and their incomes have been depressed.

The Shiv Sena has for years tried to woo the cable operators and Anil Parab, their MLA, has been leading an association to look into their interests. But a good number of cable operators are muslims and have stayed away from the Sena. The Shiv Sena, however, feels that the situation today is different and Parab, in fact, has called for a joint meeting of cable operators on 1 November following which there will be a protest march.

In Kolkata, the state government under Mamata Banerjee is preparing to protest against TV going blank on analogue cable. “When set top boxes are not in hand, analogue system should be allowed to continue and the centre has no right to blackout TV. We cannot simply accept this stand of the centre,” Banerjee thunders.

Far down south, the Jayalalithaa government has also expressed its intent to push back the digitisation deadline in Chennai by a few months. The state-backed Arasu Cable has not even got a DAS (digital addressable system) licence to kick-start operations.

In Delhi, the BJP may be waiting to seize the political opportunity if it finds there is a sizeable vote bank to capture. The capital city of India also presents another difficulty: local operators take multiple inputs from MSOs, making it difficult to gauge the actual number of STBS that have entered into consumer homes.

The comforting truth, however, is that the two main metros, Mumbai and Delhi, belong to the ruling Congress party at the centre. And it is in these cities that the cable TV industry is more prepared for digitisation.

Mumbai and Delhi, in fact, look more receptive to digitisation at this stage. The Shiv Sena’s anti-stance has come only at the tail end of the deadline. So it remains to be seen how serious it is in actually taking to the streets. And though there has been some individual voices raised, the BJP as a party has not made any statements so far.

For the ruling government at the centre, the initial days of digitisation would indeed be crucial. If there is a public backlash and consumer discontentment grows, the political will to push for digitisation would go the other way. The government can turn around and say that the industry is not yet ready for digitisation and the new Information and Broadcasting minister Manish Tewari would need time to weigh the ground reality. The end result: extend digitisation deadline by a few months.

The LCOs would want a law and order situation to prevail on the ground that a large number of homes would go cable TV empty. A counter-strategy could be to be soft on piracy of TV signals in selected pockets for a short period of time.

Digitisation across 90 million cable homes could cost as much as Rs 250 billion, according to various estimates. MSOs and direct-to-home (DTH) service providers feel that foreign companies, who are recently allowed to own 74 per cent stake from the earlier 49 per cent cap, will bring in new capital to trigger growth in the broadcast-carriage services sector. The loss-making broadcasting industry also hopes to turnaround in a digitised environment as subscription becomes a strong revenue stream while carriage fees to cable networks get corrected.

The historic date of 1 November will tell us whether India has reached full fitness for digitisation or not.

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