Industry weighs the impact as Govt pushes back digitisisation by 4 months

MUMBAI: The Information and Broadcasting Ministry’s decision to defer the date of cable digital addressable systems (DAS) to 1 November in the first phase covering four metros has given the stakeholders time to get organised. But it comes with a note of caution: the industry should not be allowed to dawdle and lose the momentum.

IndiaCast group CEO Anuj Gandhi believes the stakeholders should be able to get better organised. "Interconnect agreements are crucial to set the ball rolling. But the goodpart is that this will be monitored by the government. The important thing to observe is whether the time given is enough for Chennai to get its house in order," he says.

According to You Broadband MD & CEO EVS Chakravarthy, the buildup to digitisation over the last four months has been positive. “With the four-month extension, the deadline is achievable but it is important to keep the momentum going.The set-top box (STB) supply mismatch was an overblown issue. The real problem was with the ability of some MSOs to raise capital. They will now have more time to arrange for capital to fund the first phase of digitisation,” he avers.

Will the delay in inking revenue share and content deals with local cable operators (LCOs) and broadcasters be a serious roadblock? Chakravarthy believes the interconnect agreements are easier to deal with. “The bigger problem at hand is deployment of STBs. That is where the focus should be as the other things settle down,” he says.

So is the deadline feasible? "We are fine with the new deadline. The industry across a wider spectrum, though,
 would have been more comfortable with a six-month extension to 1 January," remarks Digicable MD & CEO Jagjit Singh Kohli.

Cable Operators Federation of India (COFI) president Roop Sharma, however, does not think that the 1 November deadline is achievable. “We will continue to protest as we want the deadline to be pushed to 1 January. The government also should start a massive consumer awareness campaign as they have pressed for digitisation so that they can collect more taxes while also yielding to the demands of the broadcasters,” she says.

The cable TV fraternity has some voices that speak against the government‘s decision to extend the deadline. All India Aavishkaar Dish Antenna Sangh president AK Rastogi believes that this will have a negative impact on the consumers who, in any case, do not want to be forced into digital television.

"Now LCOs will have to explain to their consumers that their would be no further extension. They will also have to explain why the government delayed the deadline. It will be difficult to seed the boxes. A better strategy would have been for the government to stick to the deadline and switch off signals for a day or two so that consumers become aware that they will have to buy boxes to view television content," he observes.

Some media analysts, however, feel that this move would have backfired. "There would have been a backlash against digitisation. It would be better to give time and have a smooth transition," they say.

Rastogi thinks the government should do more than just extend the deadline. "It (Government) should come out with a roadmap on
interconnect agreements between the MSOs and the broadcasters and the MSOs and the LCOs. The major problem will always be in seeding the boxes," he points out.

Rastogi blames the government and the Telecom Regulatory Authority of India (Trai) for making the issues more complex. "By having Chennai and Kolkata along with Delhi and Mumbai in the first phase, it would in any case have been a herculean task. The state governments of West Bengal and Tamil Nadu gave different signals as Kolkata and Chennai were not ready. This affected the Delhi and Mumbai operators as well. On top of that, Trai’s tariff order made it mandatory for cable TV networks to create a capacity for carrying 500 channels which further complicated the whole digitisation process,” he elaborates.

Ravi Singh, who runs a cable network in the Ghatkopar area of Mumbai as a joint venture partner with Den, believes the speed of STB deployment will slacken after the grant of a four-month extension and the confidence levels in government‘s political will to press for digitisation will fall. “There will be doubts raised now on whether there will a further extension. Some MSOs who wanted to delay it will surely get more breathing space. Still, the uncertainty will dampen investments,” he adds.

Singh wants the interconnect agreements to be ready by 30 September so that the whole thrust in October will be on deploying the boxes. "The consumers will want to know the packages that are on offer and the price they have to pay for them. That is the only way we can sell the boxes in a big way," he points out.

The DTH industry is worried that the digitisation process could go awry. Tata Sky CEO and DTH Operators Association of India president Harit Nagpal admits that the extension is a major setback for the DTH industry, which had invested a great deal in terms of STB inventory and installer manpower to cater to the expected demand on the cutover date.

“It is difficult to understand what different is being planned in the next three months that was not in the last six which would not lead to another postponement in October. Moreover, November hosts Diwali and could turn out to be an unwise cutover timeline since it is the peak month for broadcasters for ad revenues and the migrant installer community goes back to their hometowns," he rues.

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