Optimism, scepticism, caution, confusion: Industry sees it all as CAS deadline nears

NEW DELHI/MUMBAI: The government is optimistic. A section of the cable fraternity is sceptical, while another section airs cautious optimism ("with these politicians you never know," said an MSO). The pay broadcasters, except Zee Telefilms, are non-committal and the consumer remains confused as ever.

That may well sum up the present scenario for conditional access system (CAS), 14 days before it's phased rollout on 1 September.

A Mumbai-based industry watcher was categorical that CAS will not happen (from 1 September, that is), at least in Mumbai and Delhi. The senior media professional, feels it might not happen even in Chennai and Kolkata, "but the chances (that it would happen) are stronger than the probability of it happening in Mumbai and Delhi."

Though information and broadcasting (I&B) minister Ravi Shankar Prasad did admit earlier in the week that the government is fed up of playing the arbiter's role with the industry stakeholders still fighting amongst themselves, he did mention firmly that there is unlikely to be any "rollback" or "rethinking" on the 1 September deadline. But the fact remains that the set-top boxes (STBs) are moving painstakingly slowly in the south zones of the three metros of Kolkata, Mumbai and Delhi (Chennai is to rollout CAS in the whole city at one go).

At today's count, Hathway, a multi-system operator (MSO), had managed to push in about 700 boxes in Delhi and some 500-odd in Mumbai. There would be approximately 450,000 cable subscribers in South Delhi, a figure that may be slightly more for South Mumbai region.

Admitting that few boxes had been seeded in the market, a senior executive of Hathway said, "The boxes are moving and that is an encouraging sign. Why do we always look at the negative side? The demand is likely to pick up slowly as the date draws near, by which time political uncertainty would have lessened."

Zee Telefilms' cable arm Siti Cable is highly optimistic though. It feels that the flow of STBs in the four metros is satisfactory. Optimistic it may be, but industry sources say that Siti Cable has seeded about 1,200 boxes in Delhi as of date.

Rajiv Vyas COO INCableNet, echoes the Hathway line when he says that too much is being made of the number of set tops that have been sold in the run-up to the 1 September deadline. The consumer was still in a wait and watch mode, Vyas said, while admitting that the STB offtake would remain low as long as there was no absolute certainty that CAS was happening. Vyas however, expressed confidence that the CAS deadline would be adhered to.

But the confusion that still prevails over some aspects like prices of the basic tier and the pay channels and the distribution margin between MSOs and pay broadcasters does give rise to worries.

Shiv Sena Vibhag Pramukh and Mumbai's CODA (Cable Operators and Distributors Association) spokesperson Anil Parab said, "The meeting on 14 August was inconclusive and no progress has been made. The broadcasters continued to refer to the individual pay channel rates that they declared earlier. This would mean that the monthly charges would be in the range of Rs 300-500 and consumers would be hit badly."

According to another Mumbai cable operator and CODA representative, Sonali Cable's Suvarna Amonkar, "We want the FTA monthly charges to be increased to Rs 150."

Concurring on a revision of the FTA prices, Tejinder Chawla of the Delhi-based Cable Operators United Front (COUF) said that at Rs 72 it would become very difficult for cable operators to provide the basic tier even if the other problems get sorted out.

But this bogey about 'consumers to be hit badly', raised in the past effectively, is unlikely to cut much ice with the government this time. Though, the fact remains that it has been unable to rein in the pay broadcasters who, according to Prasad, failed to stick to their words on a honeymoon period consumer-friendly pricing.

Ideally Parab would like a "government task force to determine the rates of the pay channels and impose it on the pay broadcasters (as it did in the case of the basic tier)". But unless the government feels that the pay broadcasters are out to sabotage CAS rollout such a drastic step is unlikely to be taken. It also seems that the I&B ministry has been legally advised against trying to regulate pay channel prices.

The flip side of all this is that CAS is rolled out in a limited way in the south zones, as per a plan, but what would happen to Zee's head-end in the sky (HITS) project in the absence of other broadcasters agreeing to join the platform?

On 14 August, though Zee Telefilms vice-chairman Jawahar Goel reiterated his company's resolve of providing all pay channels to consumers at Rs 128 at the CAS panel meet in Delhi, Star's on-the-spot denial of giving its channels to a Zee HITS platform does put a question mark on the project, if not on the rollout of CAS. However, these posturing notwithstanding, industry observers said that as days go by and CAS is rolled out, erratically maybe in the beginning, Star and Sony would join the platform.

"It would make sound financial sense," a Delhi-based industry observer said, pointing out that with Zee's aggressive marketing of its HITS platform, a large number of cable operators would start subscribing to it.

Obviously, Zee would do all it can to make HITS work. Through projects like HITS and DTH it can ramp up Siti Cable's revenues and activities, which would help in the evaluation of the cable arm just before its proposed initial public offering that may be just 18-24 months away. A senior executive of Zee Telefilms admitted, "Star and Sony have not yet agreed to come onto our HITS platform, but such negotiations are likely to be finalised after the initial rollout of CAS and not before it when lot of posturing would be done."

With the government also having accepted more or less the prices of pay channels given earlier -- a rock bottom price of Star Plus, Zee TV and Sony at Rs 10 each would be asking a bit too much -- the only hitch can come if individual and independent cable operators and certain politicians act adamant on non-implementation.

Goel's comments had come at the end of the second meeting of the recently constituted 16-member conditional access system (CAS) implementation committee in the capital. What the next meeting of the committee scheduled for 26 August throws up remains to be seen though.

But, as in cricket the match's outcome is open till the last ball is bowled, CAS' rollout would continue to be speculative till the time it actually happens. And since no new system is foolproof from the first day, unavailability of pay channels in certain areas would also be a reality that everybody would have to live with.

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