|Interview with HTMT group director and CTO KV
pull will determine the success of CAS"
|Posted on 31 May 2003
HTMT group director and CTO (chief technology officer) KV Seshasayee
is the man in the centre of action. He is the man who will spearhead
the efforts to ensure that HTMT subsidiary company INCableNet's
conditional access system (CAS) becomes a success. During
the last few months, he has utilised every bit of his 25 years plus
experience in the automotive, IT and communication industries towards
is also the director-in charge for the new economy and telecom ventures
within the Hinduja Group. He is also the chairman of Fascel Ltd.;
the Gujarat cellular company that claims to be the most successful
and profitable of cellular company in India; and having the largest
subscriber base in any circle outside of Mumbai and Delhi. Seshasayee
is an active member of CII's National Telecom Committee, and is
a present member of CII National Council. Also associated with various
Industry associations like COAI.
the last few months, Seshasayee hasn't found much time to indulge
in his passions that include cooking and listening to music (right
from jazz to Hindustani Carnatic). Indiantelevision.com's Ashwin
spoke to him on the same day when the government announced duty
reductions on set top boxes and KVS (as he is popularly known) was
started off his discussions
by saying that they have received an internal memo that the entire
CAS project team will have to work on Sundays too - well what's
new? he added, while dismissing it as one of the rigours of corporate
life! Excerpts of the discussions:
the Indian market ready for CAS?
The streamlining of the hitherto disorganised nature of the
cable business in India was an eventuality. We had realised it long
back. It is worthwhile mentioning that we have been looking for
set top boxes (STBs) since the past five years. At that point of
time, we realised that it wasn't feasible to get subsidised boxes
without government backing. This backing was essential because the
revenues were small and there is no way we (the multi-system operator
- MSO) could subsidise them.
years back, along with Intel, we developed the prototype of Interactive
Internet Boxes for cable networks. At that point of time, we undertook
studies to qualify the nature of our networks. The results were
very encouraging and the networks could imbibe the new technology
with minimal resistance or changes. We have successfully offered
cable Internet services to our subscribers with minimal failure
levels and this itself is proof of our capabilities to deliver.
Indian cable TV industry is poised for a quantum leap from an unstructured
system to a modernistic one.
us the background information on how your team zeroed down on the
final list of Incablenet's CAS partners and systems integrators?
As far as the group companies are concerned, we commenced the
process of screening in June 2002 during the Communication Seminar
in Singapore. Since we were initiating a major process of moving
from an unstructured system up to an efficient kind of a structure,
we wanted serious partners who would stick with us for a long time.
shortlisted 34 box companies; 12 vendors of SMS and billing systems;
and six CAS companies. By August, formal requests were sent for
information and by October, we had sent the request for proposals.
In December 2002, we asked for quotations based on volumes. By February
2003, we narrowed down the list to two companies and finally chose
started negotiating with Nagravision for a long-term partnership.
In fact, Nagravision agreed to become a vendor as well as took a
stake of $20 million. Another reason why we chose Nagravision is
due to the fact that their systems have been the least hacked ones
in Europe and other countries.
far as the box companies were concerned, we shortlisted four of
them. Again, the aim was to target those companies that would shift
quickly into indigenisation and localisation (in terms of manufacturing).
We also wanted partners who were committed and had a long-term interest
in the Indian markets. We stayed away from those Asian or European
companies that didn't fulfil these criteria - despite the fact that
some of them assured us of huge volumes.
chose Magnaquest as our SMS partner since they had already integrated
with Nagravision. The company was an Indian company with international
expertise and experience. They have undertaken a large number of
installations in the Middle East and worked with Asianet and Spectranet
also effected some internal changes in order to make our networks
compatible to the new order. We already had a headend from BARCO
and we roped in Tandberg for a digital headend.
kind of internal restructuring was undertaken?
already have an inhouse IT team (Hinduja TMT) including a qualified
team of networking professionals. We created project management
teams to handle this challenging task. At present, a team of 60
people is working on a 24/7 basis on the project.
were already utilising the services of SAP for ERP (Enterprise Resource
Planning). Siemens Information Systems was implementing the same.
The challenge was to create modern infrastructure and integrate
it. Satyam Infoway is involved with the VPN (voice protocol network)
and our in-house team provides additional inputs.
have already set up a call centre in Mumbai and another satellite
centre will come up in Delhi soon. We have taken care of the logistics
and have taken warehousing facilities in Mumbai and Delhi. The next
step was to fill in the slots for the various links of the distribution
about training the affiliates and testing the networks?
undertook multiple training sessions at every level - distributors,
LMOs, headend and the line people. Our efforts also sent out the
proper message that we are serious about CAS and also would include
the operators as part of the new order.
we educated our own people so that they were empowered to inform
and educate the franchisees. We have completed one training video
and are on the verge of completing another video. The training material
will be shared with all the 1,000 operators in Mumbai - as well
as those in other cities.
I have said earlier, a lot of tests have been successfully conducted
on our networks. For simulation purposes, we have even taken the
worst-case scenario - the worst possible networks too. It is pertinent
to mention that we have completed fibre optic cable work in Bangalore
and Mumbai; will be completing the same in Delhi soon. We have ensured
that true fibre reaches till the nodes.
shall develop something similar to a PDS (public distribution
system) on the ground with field executives combing the length
and breadth of the metros"
What kind of efforts have been made to ensure that your franchisees
are bullish about CAS and subscribers buy boxes?
last mile operators (LMOs) are a part and parcel of our distribution
chain. We are not going to sever any relations with them. They will
be our ambassadors. They will undertake customer service and will
be our front end that will interface with the subscribers. We have
adopted the same model as that of the cellular industry.
government's decision to reduce duties has been a right move at
the right time. As far as INCableNet is concerned, we have already
announced the various schemes. There will be several types of schemes
- rentals, deposits, credit card payments, outright payments, monthly
subscriptions, ATMs, prepaid cards and payments through the Internet
(web based payments).
shall also develop something similar to a PDS (Public Distribution
System) on the ground with field executives combing the length and
breadth of the metros. Some of them will report to the LMOs. You
will witness a lot of action on the direct marketing front. After
all, LMOs will strive for 100 per cent declaration, as their revenues
will depend on it.
is an interesting analogy that you have drawn between the telecom
industry and CAS roll out. Tell us more?
there are some similarities between the rollout of CAS and the cellular
revolution which took place two three years back. There was a great
amount of network upgradation even in the case of the cellular industry.
In fact, the process is still continuing.
cellular industry placed a lot of emphasis on customer care. Building
telecom brands became a norm and the order of the day. All these
things will happen in the cable TV industry post-CAS. If you notice,
there has been zero marketing in the cable TV industry. Now, concept
marketing will come in. The LMOs will be needed to sell the concept;
explain the various nuances to the customers; maximise revenues
for the different links in the distribution chain.
all, the more the number of channels taken by the subscriber, the
better the revenues. It is important to note that the cable trade
won't be able to thrust anything upon the subscribers - the intent
will be to lure the subscriber. The same line of thinking prevails
in the telecom industry.
what kind of learnings or insights did you take from the telecom
experience while preparing for CAS?
experience at Fascel and Cellforce has given us a lot of insights.
We have attained several milestones and created records of sorts
in Gujarat. We have learnt a lot of lessons from the operations.
the fact that cellular services were perceived as high priced services
targeted at the elite. At present, that particular perception has
changed and the penetration of cellular services has really increased
and cut through demographics and psychographics. A similar situation
exists currently in the case of CAS and STBs.
forward, our sole intent will be to sell the services to the common
man by clarifying the value proposition. Just as in the case of
the telecom sector, the value proposition will keep on increasing
and the prices will continue to fall - but customer uptake will
be higher. As volumes are ramped up, the prices will crash too.
is one more important aspect that people are missing - India will
become a very lucrative destination in the global scenario. A figure
of 40 million plus boxes is huge and international manufacturers
of digital STBs will be forced to bring down the prices due to the
demand. Within a year or so, the prices of digital STBs will be
at par with those of the analogue STBs even in the global markets.
several countries, STBs are offered free of cost. But, monthly
subscriptions are as high as $40. India, there is resistance
to go below $5 per month"
there any perceptible differences in the way in which CAS rollout
in India vis-a-vis developed countries?
team has visited several countries and studied the cable TV systems.
In a country like Germany, there is a lot of uniformity and a single
dominant player Dutch Telecom is calling the shots. The virus of
"hacking" is not prevalent.
other European countries such as Portugal, Italy and France the
systems aren't as orderly as Germany - perhaps more similar to India.
There are a lot of problems including hacking. Another issue relates
to the billing systems. The billing systems in the developed countries
are impeccable because they set the tone for customer service.
in several countries, STBs are offered free of cost. However, the
monthly cable subscriptions are very high - sometimes to the order
of $40. In India, there is resistance to go below $5 (Rs 250) per
month. However, Indian consumers must understand that there is a
limit to what can be done with $5!
consumers think that they can get everything for free. This kind
of a mentality has to change and is already changing. So, the developed
markets cannot really be compared to India in the real sense of
kind of value added services can we expect in the cable industry
in the near future?
in the case of the cellular industry, everything started with "voice"
and progressed to other value additions (VoIP, SMS, VMS, data) with
time. Similarly, in the case of the Indian cable industry, the process
of moving up the ladder will be a gradual one.
of the Indian cable TV networks aren't two-way and only 10 per cent
can be termed as two-way. Several new features such as Interactive
TV depend on "return path".
will soon launch STBs with Internet capabilities - subscribers can
access TVs and PCs on the same. Another really highend application
includes STBs with built in personal video recorder and a TiVO box.
key will be to ensure flexibility and scalability. Consumers have
to be guided through the various stages and have to be given a chance
to upgrade There are immense opportunities as long as the offerings
are backed by proper service. However, value added services will
depend on several aspects including the availability of the return
were several possibilities - the "interactivity" services
(gaming, high profile events) will take some time to become a reality.
Other services such as pay per view (PPV) or video on demand (VoD)
might be launched sooner.
the near future, we shall provide boxes with telephone-related services
such as return-calls, messages amongst others. Customers will also
be able to interface with us through the Net through e-mails. The
group already has several websites - portals and ISPs. We have the
would say that if broadband operators could become a future
threat to the cable industry; the vice versa could also become
will broadband operators be a threat to cable operators and MSOs?
would say that if broadband operators could become a future threat
to the cable industry; the vice versa could also become true. Remember,
broadband and telecom services can be delivered in multiple ways
time back, Dishnet DSL was perceived to be a threat to cable modems.
Current statistics indicate that Dishnet DSL is one tenth that of
cable Internet. I feel that cable companies could become major players
in the telecom arena subject to approvals and permissions.
years back, we did "voice" experiment on our cable networks
and VoIP on cable Internet has become a reality today. We launched
cable Internet services during the monsoons. Everyone warned us
against it. We had a failure rate of five per cent and by these
monsoons we shall have a failure rate of 0.5 per cent.
believe that telecom companies don't have the services capabilities
that cable companies have. For instance, there are so many complaints
of blind spots and lack of proper signals even in metropolitan cities.
Despite the advances in technology, these problems haven't been
sorted out as yet. The cable industry gets relatively fewer complaints
and several of these problems have been sorted out too. The service
standards are also better - one telephone call and the cable operator's
team will attend to the same within a day a two.
I said, we have the fibre-optic backbone and the capabilities. The
last mile is co-axial but the overhead co-axial in our networks
is solid. Unless someone deliberately tampers with it, it shouldn't
give us any problems. The group has invested billions in high quality
cable. The customer will get quality reception. Post implementation
of CAS, we shall conduct periodic checks on the quality of the networks.
Through our call centre, we shall seek customer feedback and this
will help us to pinpoint gaffes, if any.
kind of safeguards and disaster management systems have you adopted?
We have extremely rugged disaster backed systems that will have
safeguards against any eventuality. We have back up systems in Mumbai
as well as in Delhi. Even if the whole system in Mumbai collapses,
we can run the networks from Delhi or vice versa. This is the advantage
of centralising our entire IT system.
have also obtained ancillary requisites such as 24/7 power, bandwidth,
UPS, gensets - the entire gamut.
have placed systems wherein the LMO can access the system through
the web or through our internal V-SATs. We shall provide access
through the fingertips. We have impeccable data collection systems
- we can provide the data that government requires at any given
our control rooms, we have round the clock surveillance systems
and biometric systems. Hi-tech security systems are already in place.
chosen as an ASP tool, the HITS model raises several questions"
is your view on the HITS model which has been proposed by the Zee
Group's cable arm SitiCable?
model has its own pros and cons. Everything has to be decided within
the purview of the legal and administrative framework.
for one's own internal needs is an acceptable solution; but if chosen
as an ASP (Application Service Provider) tool, the model raises
instance, if the MSO can download, re-upload signals - what is the
MSO's legal status? Doesn't the MSO become a broadcaster and shouldn't
the laws applicable to the MSO be applicable in this case? What
happens if the MSO is not running it internally but giving it to
independent smaller MSOs? What happens to the customer confidentiality-related
issues in the case of the smaller MSOs?
also requires a high level of IT at the main headend and the control
rooms. It becomes imperative to build security or rather I
would term it as Chinese walls at these ground levels. Consider
an example wherein LMOs in Mumbai and Chennai have different permutations
and combinations of FTA and pay TV channels. Sophisticated IT systems
are required to unravel the complex multiple permutations and combinations
for billings and SMS systems. Not many LMOs in the country are equipped
to tackle these issues.
positives for HITS include the fact that broadcasters save a lot
of money on interconnectivity and at the headend level. HITS is
also a good proposition for DTH (direct to home) services.
firmly believe that DTH doesn't directly compete with CAS. DTH
is definitely costlier..."
A lot of research has to be conducted on DTH. The group companies
had explored the feasibility of DTH services by entering into an
alliance with GE.
believe that DTH doesn't directly compete with CAS for the following
* DTH is definitely costlier as consumers have to invest in a STB
as well as a dish.
cities such as Mumbai and Delhi, DTH will get hit by space constraints.
will the consumer locate free space for physically mounting the
dish? Also, in areas that receive ample rainfall, bigger dishes
will be required. If a society chooses to install a single dish,
then all the participants will be bound by the same permutation
or combination - there is no question of choice. In this case, they
will have to invest in a headend and the costs will go up.
expensive cable is required to connect the dish to the box. DTH
operators will have to find solutions for these problems. Having
said that, DTH will definitely be a boon in semi-urban or rural
areas where cable TV signals are weaker.
does the future hold for all of us?
In the near future, quality content will be the pivot that will
drive the business. Our internal research conducted on a sample
size of thousands of people in the city of Mumbai shows that viewers
are willing to pay for being able to watch programmes of their choice.
They didn't mind paying much more than $5. The best part is that
this trend cuts across demographics and psychographics (right from
Malabar Hill to Dharavi).
onus is on content producers to deliver quality content that will
induce or stimulate desirability. The cricket and soccer world cups
will no longer be free. There will be a demand for premium content.
There will be consumers who won't mind paying Rs 100 for watching
the premiere of a blockbuster film like Devdas on the night
of the release. Content pull will determine the success of CAS.
will be the name of the game. The LMOs in Chennai will have different
permutations and combinations even in the FTA tier. Every city has
a non-native population of around 30 per cent and these people would
exercise the right of their preferences. Consumers will demand and
LMOs will have to listen.
also reworks STB package; to offer 70 channels in FTA tier
INCableNet brands conditional
access service 'INDigital'