Consumer adoption level at 25-30%

MUMBAI: JP Morgan believes that the level of adoption by the consumers would be around 25-30 per cent by the end of the year.

The JP Morgan report offers a perspective from the consumer point of view:

Currently, the subscriber pays anything between Rs 100 and Rs 350 per month for his cable TV subscription. For that amount, he gets 80-100 channels. In the post CAS regime, the price of the channels (or bouquets) is likely to come down. However, the extent of the reduction in price will be linked to subscription levels.

The payment for the channels is likely to come down. However, the financing charges and the additional service tax of 3 per cent will have to be borne by the customer. The consumer will end up spending Rs 293 under current levels and Rs 366 (post CAS with a 10 per cent drop in bouquet rates and coupled with STB financing monthly payments); Rs 357 (with a 15 per cent drop in the bouquet prices); Rs 348 (with a 20 per cent drop) and Rs 248 (with a 50 per cent drop).

Overall, from the customer's perspective the outgo is likely to increase. A different perspective can be that the subscriber might subscribe to two of the three mainstream bouquets in which his payment remains the same as now. However, the number of channels watched comes down in that scenario.

Percentage of subscribers who will take up CAS

This is the million-dollar question. Industry expectations vary from 10 per cent to 70 per cent. The main determinants of the decision for the subscriber are:

o The price of the STB, i.e., the decision on their duties by the government and the subsidies offered by MSOs, if any.

o The FTA bouquet pricing as determined by the task force and its approval by the government.

o The pricing of the bouquets.

Given the level of uncertainty, this is a difficult question to answer. The level would be around 25-30 per cent by the end of the year.

One might see a greater subscription of STBs going forward, as channel prices and STB prices reduce. Additionally, it must be noted that a significant proportion of the metro subscribers will likely have multiple television in their homes, for which they take only one cable connection. The emergence of STB-based pay channel may thus lead to higher declaration than expected.

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