is an executive summary of a Viewpoint Paper presented
to the Prime Minister's Office on 16 March 2007. The
Paper was produced by research firm Media Partners
Asia (MPA), and also supported by Liberty Global,
Inc; Macquarie Media Group and Star Group.
current cable industry, which already contributes
0.6 per cent directly to GDP, has the potential to
increase this direct contribution exponentially, if
it maximizes its broadband digital potential and attract
investment. To do this, cable needs to be seen by
the Government of India as the significant platform
in the national economic context and as the key driving
national broadband digital growth. Therefore, it needs
higher priority in policy planning and a framework
that allows it to maximize value.
today in India is the dominant last mile pipe, connected
to 20 million more homes than fixed line telephony.
Cable TV already connects an estimated 71 million
homes and almost 60 per cent of homes that own a TV
set subscribe to cable TV, with India overtaking the
US in 2006 to become the second largest Cable power
in the world. Projected to further establish its status
as the leading last mile network, cable will, serve
more than 100 million TV homes by 2010. Its size and
scale, if harnessed, presents a great opportunity
to drive broadband digital deployment.
is needed is an influx of capital an order of magnitude
greater than currently exists. However, investors
say that sentiment on broadband digital development
in India is being somewhat dampened by the regulatory
framework, which has grown too intrusive and harmful
to long-term growth. As a result, investors are still
cautious about funding long term broadband digital
network upgrades when regulation imposes strict controls
on the pricing of new capital intensive services.
Concerns have intensified with the regulation for
the deployment of digital conditional access systems
or CAS in India. While all investors are agreed that
CAS will provide a significant impetus to the deployment
of broadband digital networks, they think it will
work only in a less tightly regulated context.
O'Neill, Chief Strategic Officer & Board Member,
Liberty Global Inc., says: "The market is very
attractive in terms of sheer size and growth potential
but could be held back by 'over regulation' in key
areas such as channel rate regulation, mandated revenue
shares between industry participants and FDI caps.
A lighter approach might be necessary to encourage
the significant investment required to develop the
broadband and digital industries both of which are
very important for India's future development."
Harvey, MD of Macquarie Media Group, adds, "We
think India's cable businesses, due to their ability
to offer a range of converged services, will be material
areas of growth and opportunity. A key element to
realising these growth opportunities will be a transparent
and proactive regulatory environment - this must be
a priority area of government focus."
Aiello, the new CEO of STAR Group says: "The
stakes are high for policymakers and the regulator
to get it right, ensuring progressive policies that
facilitate investment and growth."
are eyeing many deals in the cable broadband/digital
space... one of the complications for some of the
larger investor groups is how the current regulatory
framework will play out - the current restrictions
on revenue share, channel distribution and pricing
are not optimal for investment, especially as there
is no concrete signal was to when these restrictions
will be lifted.
views expressed here are those of the author and Indiantelevision.com
need not necessarily subscribe to the same.)