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The report has predicted that financing options which will crop
up in the next few months would lead to a 30-40 percent box penetration
in the four metros within 12 months of the cut-off date. The report
also foresees that MSOs, broadcasters and consumers would be the
ones most benefited from implementation of CAS.
The report has given the following reasons for its deductions:
Ø Pricing of the basic tier, comprising free-to-air (FTA)
channels would be Rs 60-90 per month per subscriber. The local cable
operator (LCO) would have to pay for entertainment tax (Rs 30 in
Mumbai) and service tax (5 percent on revenues) out of this collection.
Such a pricing would mean that LCOs would have to market the premium
tier (comprising pay channels) to subscribers, in order to make
decent profits.
This would also ensure higher consumer surplus (at least Rs 110-140
considering current outgo of Rs 200 per month as cable rent today)
to spend on pay channels after paying for the basic tier.
Ø The pricing of the STB would be a key issue, which could
determine the penetration of boxes in cable homes. It is believed
that digital boxes would ensure fairly high protection against hacking
and would be a future proof standard to adopt. Current government
import imposts are 56 percent for boxes. The landed cost of the
entry-level digital box would be Rs 7,000 in the current scenario.
However, the price could fall to Rs 4,000 if the manufacturing/assembly
could be taken up in India and volumes build up. Motilal Oswal analysts
believe that consumer finance options for boxes would make them
affordable for consumers. Some MSOs, notably InCable, are open to
subsidizing boxes if subscribers promise to be on the network for
a specified period of time.
Ø The report points out that inspite of the reservations
in some circles that advertising revenues would get hit due to poor
box penetration, the box availability would not be a big issue.
MSO s would come forward to encourage box take-up by subscribers
and financing options would emerge. That would lead to a 30-40 percent
box penetration in the four metros with in 12 months of the cut-off
date.
Broadcasters will consider
FTA offering apart from premium pay TV channel, says Motilal Oswal
Motilal Oswal report says
CAS unlikely to impact Zee Telefilms till 3FY04
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