(10 June 2008 8:00 pm)

NEW DELHI: Existing direct-to-home (DTH) players Tata Sky and Dish TV are likely to be allowed to stay on MPEG 2, even after the new entrants come on MPEG 4. The ministry of Information & Broadcasting is slated to have an internal meeting on 12 June to finalise this, sources told indiantelevision.com.

What is being worked out is that older players will stay on the MPEG 2 format. If new players like Reliance's Big TV want interoperability with the latter, they will chip in about Rs 450 ($8 or 9) per old set-top box (STB) to fit the MPEG 2 boxes with an equipment called the transconder.

The older players have said that MPEG 4 does not improve reception quality, but only increases the number of channels that can be compressed per transponder.

"We have successfully demonstrated that all the arguments so far - be it in Trai, Tdsat or other forums - in favour of MPEG 4 has been the question of transponder space crunch versus the need to give more channels per transponder, and no one has argued about quality," a Dish TV official told indiantelevision.com.

The two initial players claim to have proven that MPEG 4 and the earlier version renders the same effect audio-visually. Hence there is no need to change over to the new compression format.

A paper submitted in this connection by Dish TV points out that BIS (Bureau of Indian Standards) and Trai (Telecom Regulatory Authority of India) have not approved MPEG 4 and the boxes are not as per "Indian Standard for DTH STB," as has been specified in the license agreement of DTH.

It adds that the new players who adopt MPEG 4 will have to come out with a device which can make their services compatible to millions of boxes already deployed with consumers, especially since Trai insists on interoperability between the formats and on allowing subscribers to change service providers.

The older players have also argued that financially it will be ruinous to switch over to MPEG 4.

"Going by today's pricing norms, MPEG 4 boxes are 50 per cent more expensive than MPEG 2 boxes and in dollar terms the difference is about $20. So if an operator puts 1 million boxes in a year, he spends $20 million more whereas for a 10 transponders set up, he will save only $3 million. This makes its subscriber acquisition cost expensive and thus will hurt the bottom-line even more," they have told the ministry.

"The issue is practically decided and the government is convinced we are right. The 12 June meeting will finalise this," a confident Dish TV official told indiantelevision.com.

Officials at MIB did not wish to comment either way but agreed that the older players have had many discussions on this with them.