According to various industry estimates there are 71 million cable and satellite (C&S) homes in India. Most of these C&S homes are being served by analog cable which is non-addressable and has severe capacity constraints. World over there is a migration from analog to digital technology. Digitization enables carriage of more number of channels in the same bandwidth, better reception quality, and delivery of various interactive and value-added services such as video on demand, Internet, gaming, and EPG to the consumers. Alternate content delivery platforms such as DTH and IPTV are digital too. Accordingly, digitization of cable is imperative, in order to compete with these digital technologies.
It is of utmost importance that the digitization of the cable system should be pragmatic and profound, which addresses the issues of country-wide rollout so as to bring consequent cost benefits to enable opening up the market for new digital usage, competition, and advent of diverse innovative processes. The main objective of initiation of digitization is to ensure that the country remains attractive as an investment destination, provides for optimal bandwidth usage, growth in terms of introduction of value added services and the Indian companies/service providers are not left behind in adopting latest technologies in broadcasting and distribution sector.
HITS
Headend-in-the-sky (HITS) is one such mode which confers benefits of wider reach even in far-flung and rural areas and also ensures digital delivery in most effective and economical manner. With HITS technology, the digitization and addressability can be achieved throughout the country in one stroke and with an investment far lower than what is needed to establish terrestrial digital headends in each city.
In the HITS system, pay channels are received from their respective satellites at one centralized location. The pay channels are decoded, combined and re-encrypted with a common encryption and thereafter the signals are again uplinked to a satellite in "C" Band frequency. These signals are then downlinked by individual MSOs/cable operators at their headend (control room).
Cable operators need only one transmodulator per transponder (presently carrying 12-14 TV channels per transponder) for further re-transmission through cable to individual subscribers having the facility of set top box for exercising their choice of receiving the signals of those channels that are to be viewed by individual subscribers. Analog free to air channels can be received by the subscribers even without decoder and mixed for sending to the subscribers' homes in analog format. The cable operator can receive digital free to air channels with digital stream. The digital free to air channels are made available to the subscribers without going through de-encryption system of the set top box, whereas the analog channels are passed through the set top box. A subscriber can exercise his choice of channels and the same are activated through subscriber management system (SMS) maintained at a centralized facility.
ImageExisting system of distribution of channels in cable (analog mode)
Under the existing system of cable distribution there are several headends all over the country which are engaged in the distribution of signals/channels to cable operators, which are ultimately delivered to the household viewers through the cable connection. In the current method of distribution, the pay channels and FTA channels are combined in a bundle by the cable operator which is made available to a consumer for a lump sum price.
The MSOs and independent cable operators have set up headends to receive and transmit TV signals, which comprise essentially satellite dishes, receivers, integrated receivers, and decoders (IRDs), modulators, and fiber transmission equipment. The satellite dishes are used to downlink and receive the channels in both free to air (FTA) channel or pay channel mode. The signals received from the dishes are fed into the receivers for FTA channels and IRDs for the pay channels. The output from the receivers and IRDs is modulated and fed into fiber/coaxial cables and amplified at various places throughout the length of the cable to bring signals to the customer's premises. In a typical analog distribution platform, 65-70 channels can be delivered to the consumers.
The existing system of un-addressable analog cable distribution is characterized by the following:
The analog cable networks have severe capacity constraints. Typically these analog cable networks can carry only about 65-70 channels in all out of which only about 35-40 channels can be carried on a viewable band while rest of the channels are carried on hyper band (upper frequency) which have very little picture clarity. It is pertinent to mention that at present there are about 300 channels available over Indian sky.
The present analog system does not provide any choice to the consumers. Who are forced to take all the channels that are being supplied by the broadcasters to the MSOs and cable operators. There is no mechanism or methodology in an analog environment to deliver the channels, only as per consumer's choice. A consumer is by default forced to have the entire bouquet of channels irrespective of the fact whether he wants them or not.
There is no prevalent technological mechanism to determine the actual number of subscribers receiving a particular channel in non-CAS analog environment leading to various disputes and litigations in the sector. Although the entire value chain in cable distribution is working on the basis of "negotiated subscriber base", the broadcasters allege "under declaration" of number of subscribers by MSOs and cable operators.
There is no distribution margin for MSOs and cable operators for distributing and delivering the pay channels to the end subscribers.
Revenue loss to the government because of less than 100 percent declaration as there is non-compliance of service tax and entertainment tax liabilities.
Absence of uniform pricing with prices fluctuating across geographies and consumer segments.
HITS technology tackles/addresses all the above-mentioned drawbacks of the analog system. All the stakeholders in the broadcasting sector have always acknowledged and accepted that all the above mentioned issues including the issue of number of subscribers/declarations, and capacity constraints are to be resolved by all possible legal means while also ensuring effective consumer choice.
HITS technology is a complete answer for a voluntary implementation of an addressable system in non-CAS areas, which is completely in accordance with law and without requiring the issuance of notification for declaring the existing non-CAS areas as CAS areas for achieving addressability.
Methods of implementing digitization and addressability
The digitization and addressability in cable distribution can be implemented in two ways:
By establishing digital infrastructure at each individual headend (control room) of MSOs/independent cable operators
By establishing the digital infrastructure at a centralized facility
The establishment of digitization and addressability at each headend requires decoding infrastructure to decode signals received from pay channel broadcasters and encryption infrastructure to re-encrypt pay channel signals for distribution to customers through cable operators under CAS. Subscriber management system (SMS) has to take care of subscription/channel choice of the consumer, billing based on services subscribed, details of the payments received, mechanism to record and effect the request of change in the subscribed service - mainly addition and deletion.
The Telecom Regulatory Authority of India (TRAI) analyzed the strength of HITS as a method of implementing digitization and addressability and in its consultation paper has inter alia observed:
Cost of digitization through conventional cable system for the entire country: This would essentially require converting the existing 7000 analog headends into digital headends. The cost of a digital headend including CAS and SMS ranges from Rs. 2 crore to Rs. 8 crore or more depending upon number of channels and sophistication of CAS and SMS. Thus, even at the lowest cost, the total amount required for 7000 digital headends would be upwards of Rs. 15,000 crore.
Cost of digitization through HITS for the entire country: Earth station of HITS operator would cost Rs. 15 crore, and transmodulators of cable operators would cost Rs. 1200 crore (Rs. 2 lac per operator for 60,000 operators). The total capex would be around Rs. 1215 crore. Cost of hiring 10 transponders would be Rs. 50 crore per annum for HITS satellite (Rs. 5 crore per annum per transponder on recurring basis).
Thus, HITS could, theoretically, digitize the cable transmission in the whole country with a capex of Rs. 1215 crore and a recurring cost of Rs 50 crore per annum, as against the capex of more than Rs 15,000 crore for conventional terrestrial digitization. These cost comparisons do not include the cost of upgrading the last mile cable network and the cost of set top boxes, because these are common to both HITS and conventional digitization.
Gain to subscriber. The biggest advantage to the subscribers is that high quality digital transmission with value added services will become available to the subscribers throughout the country at one go. Since the reach of HITS service operator increases manifold, the cost of set-top box will come down due to economy of scale. The subscriber will not have to change the set top box if he shifts anywhere else within the country, so long as the cable operator in the new locality is affiliated to the HITS operator. The viewers will continue to watch the free to air channels in analog mode bypassing the set top box or even without a set top box if they do not want to subscribe to the pay channels. The digital transmission will enable operators to show many more channels to the consumers thus offering them a wide variety of choices. The implementation of CAS through HITS will bring down the cost of distribution etc. which may lead to a consequent reduction in subscription rates.
Benefits to cable operators. The cable operators will get access to digital quality transmission throughout the country, which will help them in competing with other forms of digital delivery such as DTH and IPTV. The cable operator will have the flexibility to take feed from MSO and giving feed through terrestrial mode or from the HITS operator. If there are more than one MSO using the passive HITS platform for transmission, then the cable operator's choice of MSOs will increase. In stand alone CAS implementation, operator will have to invest on the SMS. In HITS model he will not be required to have an independent SMS of his own. With growing number of channels, cable operator will have to upgrade his network capacity from present 550 Mhz to 850 Mhz in conventional analog mode. In HITS model he will be saved of this capital expenditure because by having digital transmission, he can carry more channels in existing network. The disputes among cable operators, MSOs and broadcasters, mainly related to number of subscribers, will be minimal because of addressability in HITS.
Benefits to the government. With the implementation of digitization through HITS, the incidence of under-declaration of the subscribers by the cable operator will be reduced and, therefore, the substantial loss that is caused to the government by way of evasion of taxes will be prevented. The implementation of CAS through HITS will ensure a centralized mechanism for distribution of signals for various pay channels which will in turn make the monitoring/regulation of the industry by the government much more convenient and effective. The task of policy and of planning for this sector will become easier as all the information regarding the number of subscribers, their opted services, the payments made for such subscribed services, etc would be available at a single centralized location, as opposed to the digital implementation through thousand of individual headends wherein such information would be scattered and difficult to monitor.
However, on the balance, it cannot be denied that HITS operation will certainly lead to better and more economical digital services to the public, thus ensuring assured revenue based on the actual number of subscribers availing their services, in addition to centralized data of subscribers for effectively realizing taxes by the government through HITS. It however needs to be stated that even other existing digital addressable systems (DTH, CAS, cable) have many of these advantages, but what is relevant is that there are certain areas where HITS has a distinct advantage. More importantly, the value of HITS as an alternative or additional platform for delivery having a potential to increase the competition cannot be over emphasised.
CONCLUSION:
Selecting HITS based delivery technology paves the way for uniform delivery of signals country wide with high flexibility and low cost per headend. It also provides for easy migration of customers from city to city as well as protection of investment in Customer Premises Equipment (CPE). Thus, in the existing scenario, HITS is the best and the cheapest way to implement addressability and digitization in cable distribution.
