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CHENNAI: Most local cable operators (LCOs) in the metros do not expect further postponement of digitization deadline, a report by brokerage firm Motilal Oswal said. The LCOs are also confident of achieving almost full seeding of STBs (set-top boxes) by the government-mandated deadline of October 31, 2012.
The report also states that price increases are likely to be taken to offset higher tax incidence (service tax, entertainment tax) and content costs post digitization. The West Bengal government is likely to demand further extension of the digitization deadline. In Tamil Nadu, where digitization is to be carried out by state-run Arasu cable, there are concerns on timely seeding of STBs, said the report. It also adds that lower preparedness in Kolkata and Chennai is a risk to maintaining digitization deadline.
Compared to around 15% of the subscribers in the US, India has undertaken a humongous task of converting about 80 million analog subscribers to digital within a span of three years.
The report goes on to mention that while the government had earlier fixed a deadline of third week of August for contracts with MSOs to be in place, many of them are likely still in the negotiation stage. Distributors continue to sign fixed-fee deals with MSOs (similar contracts are prevalent with DTH operators as well) even in a digitized environment. While digitization remains an important event for TV broadcasting/distribution sector, analysts say that valuations are largely full. This leaves little margin of safety in case of any disappointments, said the report.
Cable operators confident of meeting digitization deadline: Report - The Times of India
The report also states that price increases are likely to be taken to offset higher tax incidence (service tax, entertainment tax) and content costs post digitization. The West Bengal government is likely to demand further extension of the digitization deadline. In Tamil Nadu, where digitization is to be carried out by state-run Arasu cable, there are concerns on timely seeding of STBs, said the report. It also adds that lower preparedness in Kolkata and Chennai is a risk to maintaining digitization deadline.
Compared to around 15% of the subscribers in the US, India has undertaken a humongous task of converting about 80 million analog subscribers to digital within a span of three years.
The report goes on to mention that while the government had earlier fixed a deadline of third week of August for contracts with MSOs to be in place, many of them are likely still in the negotiation stage. Distributors continue to sign fixed-fee deals with MSOs (similar contracts are prevalent with DTH operators as well) even in a digitized environment. While digitization remains an important event for TV broadcasting/distribution sector, analysts say that valuations are largely full. This leaves little margin of safety in case of any disappointments, said the report.
Cable operators confident of meeting digitization deadline: Report - The Times of India
