Regulators

TV industry gives mixed reaction to MIB's DAS III & IV extension

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MUMBAI: Even as recently as a month ago, India’s ministry of information and broadcasting (MIB) and the industry regulator the Telecom Regulatory Authority of India announced that the DAS IV deadline of 31 December 2016 was sacrosanct and that the cable TV industry would have to bite the bullet. So, when the MIB announced on 22 December that it was pushing forward the Phase IV date to 31 March 2017 and the Phase III date to 31 January 2017, eyebrows were raised once again globally.

Can the MIB ever stand firm on deadlines or can it set realistic ones, asked potential international investors who have been waiting to hear some positive developments about India’s digitizing-in-stops-and-starts cable TV sector?

But, the response on the ground amongst India’s TV broadcasters and cable TV operators was mixed. Some have welcomed the decision; others have been harshly critical of the MIB’s postponement rationale.

The MIB said the extension was being done “in lieu of uncertainty in the market due to pending court cases and unsatisfactory progress of installation of set-top boxes (STBs) in Phase IV areas.”

Speaking to Indiantelevision.com, Viacom 18 group CEO Sudhanshu Vats said, “Owing to lack of preparedness of the industry toward digitisation, it is a good move provided there are no more extensions at all.”

Questions an investment banker unwilling to be identified: “The cable TV trade has been given four to five years to digitize. And, they have not managed to do the job well over this period. What miracle will they perform in one month and three months? What’s to guarantee that the court cases will be settled and that government will not once again become weak-kneed and go in for a further postponement when these fresh deadlines come up? Investors want certainty, not this joke that the government has made of DAS.”

Hathway Cable & Datacom's Delhi distributor Vinod Chauhan said, although the order does not directly impact his operation since he was in the area covered under DAS I, it was a good move, but he questioned the logic behind it. Hathway Cable has been expanding into Phase III markets and had hopes that broadband and this expansion would help it increase its ARPUs.

Siti Networks Ltd COO strategy & compliances Anil Malhotra said that the MSO’s planning for switching over to digital coincided with the government's deadline of 31 December 2016. He said that there was pickup in demand for digital STBs of late. "We are not worried at all since we have a huge inventory of imported STBs," Malhotra said.

As the brief talk veered toward the effect of demonetisation, he said that entertainment was one of the primary essentials in the hectic lives of people today. "Everyone is ready and prepared to shell out Rs 1000-1100 for good quality STBs," Malhotra added.

Star India legal and regulatory affairs president and general counsel Deepak Jacob expresed his disappointment about the government’s decision. "When the DAS IV deadline was finally set for 31 December 2016 as per a government notification approved by Parliament, the ministry ideally cannot and should not extend the deadline at all,” he said emphatically. “Now, the government should stick to its new deadline and not allow any posptonment.”

Smaller cable TV operators are however pleased about the lifeline they have got. Said Maharashtra Cable Operators Foundation (MCOF) president Arvind Prabhoo: "I think the MIB realised that covering diverse areas in a vast country like India was a challenge. Also, taking into consideration the pending court cases against digitisation, the ministry has rightly extended the deadline. It is a good, welcome move.”

MSO Den Network CEO S N Sharma pointed out that the decision was not going to play a spoiler. He said, “It is not a six month or a year's extension. It is just three months. The decision looks fine to me. I think this will give everyone sufficient time to do the seeding.”

Most small cable networks in DAS IV service very few consumers. They are well below the size to viably provide digital cable TV. Most of these have resigned to the fate of losing their business and only livelihood, opined Hyderabad based Sky Vision MD R.S. Raju . “The currency demonetisation put a further damper. Consumers completely stopped spending on non-essential purchases, and STB deployment has been badly hit in rural areas, where plastic money is not prevalent, and new currency notes are in short-supply," he said.

He revealed that the MIB had some none to encouraging facts to reveal at the 18 th task force meeting.

"The I&B ministry has declared certain (un-encouraging) data on STB deployments, up to 25 October 2016. Between 31 August & 25 October 2016, 1.97 million STBs were seeded in DAS IV areas. In Phase III, 0.876 million STBs were seeded in the same period. Combined, 2.84 million STBs were deployed in these two months. To date, pan-India, 92.4 million STBs have been deployed till 25 October 2016, according to MIB data," Raju said.

"As per earlier MIB data till 26 July 2016, 17.8 million STBs were seeded in DAS IV areas. Combined with the new data, this indicates that 19.77 million STBs have been seeded in DAS IV areas. DAS IV covers 61.08 million rural TV households spanning 28 states & 6 union territories (2011 Census)," Raju added.

Raju further informed, “With very low ARPUs and the high cost of laying long length fibre networks to small pockets of Phase IV areas, most MSOs have only 'cherry picked' a few DAS IV areas to expand their operations. Few new headends have been set up or are planned in DAS IV areas. Generally, DAS IV areas are serviced from existing headends in neighbouring DAS III areas.”

He revealed that a representative of the Consumer Electronics and Appliances Manufacturers Association (CEAMA) mentioned that no major purchase orders were received recently by the indigenous STB manufacturers (from MSOs) at the same task force meeting.

A representative of the Indian Broadcasting Foundation (IBF) mentioned that very few requests had so far been received by its broadcaster members from MSOs for interconnect agreements for Phase IV areas.

It would be logical to conclude that rural TV viewers will either shift to Doordarshan's FreeDish or one of the six private, pay DTH platforms, stated Raju.

At the same meeting, MIB joint secretary (P&A) Mihir Kumar Singh asked the members to suggest measures to implement Phase IV by the notified cut-off date, added Raju.

And since none of them could offer logical feasible solutions, the MIB has had to take the stance it has. Additionally, the letter from the Andhra Pradesh chief minister N. Chandrababu Naidu to MIB minister M Venkaiah seeking postponement Naidu could have also forced the government to take the decision.

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