Cable TV

Reliance Info defers digital TV rollout plans

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MUMBAI: Okay, all those broadcast and cable industry people who were apprehensive that Reliance would be steam-rolling its way into their territory, can now breathe easy for some months.

It is true that Reliance Infocomm has drawn up a strategy that puts last mile cable operators in the front to drive various services, but digital television channel offerings will be outside this plan's agenda.

The reason behind this move seems to be to assure cable operators that their existing revenue streams would stay untouched. Instead, the last mile operators would be used to drive basic telephony and high-speed Internet services into customer homes.

Though Reliance has not spelt out its triple play plans officially, indiantelevision.com learns from reliable industry sources that the company will not make investments for broadcast provisioning till it has gathered a mass subscriber base for its other services through the cable operator route.

An internal assessment on the cable TV distribution business, according to the sources, has led Reliance to believe that it should not enter into the existing system dominated by under-reporting of subscribers.

"We have no interest in getting drawn into the conflict between broadcasters and multi system operators (MSOs). We feel we can't add any value to the system at this stage," a source close to the Reliance plans said, hinting that the company is also not ready with the technology and the conditional access system-enabled set-top box (STB).

The focus of the redrawn strategy would be to lure cable operators by offering them additional revenue streams.

Local operators can provide Reliance's telephony and high-speed Internet services through CAT 5 cable and earn commissions, while continuing with their cable TV service to customer homes on coaxial systems.

Details of such franchisee agreements are still being worked out. This way, Reliance feels it has a winning solution.

Acquiring customers for its triple play services through ownership of the last mile can be a long and tedious process. Local cable operators have an existing relationship with subscribers, which can be leveraged by Reliance to channels its products.

Besides, in the voice and broadband services, there is no conflict of interest with the operators. Rather, what Reliance is offering is an additional revenue stream that can "create more business economics for them," the sources said.

The video-on-demand service is set for a later launch and neither content nor the boxes required for this service is ready. At the moment, it has been estimated that a Reliance box could be priced at $50, while a hard disk-driven box will cost approximately $120.

But here also, Reliance Infocomm is looking at doing what other group companies do best: drive down such prices to grab a market share. The launch of the interactive video services is unlikely before seven months, the sources added.

For a successful take off of the voice-on-demand service, Reliance will need to have broadband rights to 800-1,000 movies. The content will then have to be digitised and converted into multi-lingual formats. Reliance, however, is still undecided on whether it should acquire rights outright or primarily have a revenue share model with the content suppliers.

Will Reliance manage to rope in the last mile cable operators who are afraid of being gobbled up by the big giant, a fear that is not totally unfounded? Will the operators break away from their old relationships with the traditional MSOs?

Reliance is trying, to say the least. In an addressable regime, operators are, in any case, going to come under the control of the MSOs.

Towards this end, Reliance Infocomm has recruited several personnel who have experience in the cable TV business with an aim to establish a, presumably, friendly link with the last mile operators.

Netway - Reliance's triple play service - has the sales and marketing division that interfaces with the cable operators. Senior ezxectives from IndusInd Media & Communications and Siti cable, for instance, have joined Reliance Infocomm in Mumbai and Delhi.

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