Biswajit.HD
Contributor
- Joined
- 5 Aug 2011
- Messages
- 37,813
- Reaction score
- 4,633
The extension of the deadline for digitization by four months will put a strain on the financial health of the DTH industry which has made investments in infrastructure to facilitate its implementation. Companies operating in the DTH space were in a state of readiness %to meet the June 30 deadline, but are now straddling additional inventory carrying costs, thanks to the government postponing the deadline to November 1, 2012, at the last moment.
The move to postpone could lead to financial losses to broadcasters, multi-system operators and others who have invested in equipment and awareness campaigns in anticipation of the June 30 deadline. Digitization has the potential to change the entire landscape of the industry and plug both revenue leakage to broadcasters and taxes to the government.
The Information & Broadcasting (I&B) ministry said an assessment of ground realities compelled the ministry to set a new deadline. Expectedly the DTH industry is up in arms. "Digitization is an important and critical policy intervention to provide high quality video content to customers. The delay in implementation is disappointing and expensive. As an organization, we were fully geared up for the earlier deadline of June 30, 2012, with significant investments made already to facilitate seamless adoption of this technology. That said, we will continue to support government's digitization agenda as it is in the best interest of our customers and look forward to its successful implementation at the earliest," said Shashi Arora, CEO, Airtel digital TV.
What has taken the industry by surprise is the last-minute postponement in the implementation date which was fixed six months ago. "The date was fixed six months ago and we wake up nine days before the deadline to say we are not prepared? The extension is a major setback for the DTH industry, which has invested a great deal in terms of set-top box inventory and installer manpower to cater to the expected demand on the cutover date. It is difficult to understand what different is being planned in the next three months that was not done in the last six months," said Harit Nagpal, MD & CEO, Tata Sky and president of DTH Operators Association of India.
Nagpal said the opportunity that is missed due to this delay is speedy digitization which would lead to broadcasters getting their share of revenues. "Moreover, November hosts Diwali and could turn out to be an unwise cut over timeline since it is the peak month for broadcasters for ad revenues and the migrant installer community goes back to their hometowns. The DTH community which is licensed, regulated and pays taxes on behalf of everyone of its customers has once again lost out to its analogue competitors who are not subjected to these rules," said Nagpal. According to V N Dhoot, chairman, Videocon Group, the government could stand to lose a few thousand of crores with this delay in terms of revenues because the market is highly fragmented and there are instances of operators not paying taxes. Digitization is expected to significantly curb the practice of under-declaration of subscriber numbers which led to tax losses. In addition to ushering in transparency and accountability, it is also expected to lead to technological advancement enabling consumers to opt for better options for quality viewing. "The delay is unlikely to affect us as we are already the leading player in the segment with six million customers and adding maximum numbers of subscribers on monthly basis," said Dhoot.
DTH players on their own have been adding nearly a million customers every month. Industry analysts remain positive on digitization over the long term. An Edelweiss Securities report said digitization has positive ramifications in terms of subscription revenues for listed broadcasters.
The move to postpone could lead to financial losses to broadcasters, multi-system operators and others who have invested in equipment and awareness campaigns in anticipation of the June 30 deadline. Digitization has the potential to change the entire landscape of the industry and plug both revenue leakage to broadcasters and taxes to the government.
The Information & Broadcasting (I&B) ministry said an assessment of ground realities compelled the ministry to set a new deadline. Expectedly the DTH industry is up in arms. "Digitization is an important and critical policy intervention to provide high quality video content to customers. The delay in implementation is disappointing and expensive. As an organization, we were fully geared up for the earlier deadline of June 30, 2012, with significant investments made already to facilitate seamless adoption of this technology. That said, we will continue to support government's digitization agenda as it is in the best interest of our customers and look forward to its successful implementation at the earliest," said Shashi Arora, CEO, Airtel digital TV.
What has taken the industry by surprise is the last-minute postponement in the implementation date which was fixed six months ago. "The date was fixed six months ago and we wake up nine days before the deadline to say we are not prepared? The extension is a major setback for the DTH industry, which has invested a great deal in terms of set-top box inventory and installer manpower to cater to the expected demand on the cutover date. It is difficult to understand what different is being planned in the next three months that was not done in the last six months," said Harit Nagpal, MD & CEO, Tata Sky and president of DTH Operators Association of India.
Nagpal said the opportunity that is missed due to this delay is speedy digitization which would lead to broadcasters getting their share of revenues. "Moreover, November hosts Diwali and could turn out to be an unwise cut over timeline since it is the peak month for broadcasters for ad revenues and the migrant installer community goes back to their hometowns. The DTH community which is licensed, regulated and pays taxes on behalf of everyone of its customers has once again lost out to its analogue competitors who are not subjected to these rules," said Nagpal. According to V N Dhoot, chairman, Videocon Group, the government could stand to lose a few thousand of crores with this delay in terms of revenues because the market is highly fragmented and there are instances of operators not paying taxes. Digitization is expected to significantly curb the practice of under-declaration of subscriber numbers which led to tax losses. In addition to ushering in transparency and accountability, it is also expected to lead to technological advancement enabling consumers to opt for better options for quality viewing. "The delay is unlikely to affect us as we are already the leading player in the segment with six million customers and adding maximum numbers of subscribers on monthly basis," said Dhoot.
DTH players on their own have been adding nearly a million customers every month. Industry analysts remain positive on digitization over the long term. An Edelweiss Securities report said digitization has positive ramifications in terms of subscription revenues for listed broadcasters.
Source : Times of India
