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The switch to digital TV could enhance the government's service tax revenue by a whopping Rs.5,500 crore a year as the neighbourhood cable operators have been disclosing only 20 per cent or so of the actual subscribers from whom they collect money every month.
With the digitisation of cable TV , the actual number of subscribers gets recorded through the set-top boxes (STBs) which contain a digital card with the user's address and details of his accounts, much like a bank debit card. There is a record of each set top box through which the signals are sent to individual homes.
The technology ensures that the broadcasters, the big distributors and the government get to know the exact number of subscribers. And this will enable the collection of service tax which has been leaking out under the analog cable system.
Most of the developed countries have phased out analog cable TV. While the US acquired complete digitisation of its cable TV sector in 2009, other countries such as China are rapidly following suit.
According to the latest study by leading consultants Media Partners Asia (MPA), India's pay-TV distribution market is on the cusp of a high growth value phase similar to North America between 1998 and 2003 and Korea during 2003-7.
MPA estimates show that continuing with the analog system would cause a revenue loss of $ 11 billion to the government over the next 10 years.
This puts the annual loss at around $ 1.1 billion which works out to well over Rs.5,500 crore a year.
According to MNA, the local cable operators (LCOs) that provide the last-mile connection to households report only 20 per cent of their total subscribers. Another study carried out by Rohit Dholakia of Batlivala & Karani Securities India Pvt Ltd has estimated that the LCOs are reporting only 15 to 20 per cent of the total subscribers.
Consumers also stand to gain from digitisation as the picture and sound quality will improve considerably. Tata Sky CEO Harit Nagpal said: "With digitisation coming in, consumers will have access to the latest technology embodied in high definition TV which will enhance the viewing experience. Consumers will also have the advantage of paying only for the channels that they want to watch and will have the additional choice of video on demand and catch-up TV as well."
LARGE digital distributors such as Hathway, DEN and IN Cable also end up losing big money under the analog cable system as they get a revenue share from a meagre 15 to 20 per cent of the subscribers. But with the digitisation of cable network, the earnings of multi system operators (MSOs) will go up as STBs ensure there is no under-invoicing by the LCOs.
Digitisation will also enable them to carry a larger number of channels as the capacity of an analog cable is much more limited.
Broadcasters are the other stakeholders getting shortchanged because of the under-reporting of subscribers. Most news channels are running into losses as they have to make huge investments preparing the news programmes and then bearing the entire cost of uplinking the content to the satellite from where is downloaded by the MSOs.
Indian news channels have to rely largely on advertisements, unlike channels in the advanced countries that earn the major chunk of their revenue through subscriptions from consumers.
According to MPA, digitisation should also help the government pursue India's broadband goals and thereby boost economic growth. A 10 per cent increase in broadband penetration would potentially increase India's GDP 1.5%. Broadband per capita penetration in India is currently a meagre 1% at present.
In its National Broadband Plan, the Telecom Regulatory Authority of India (Trai) clearly sees a pivotal role for cable operators in developing broadband infrastructure, with digital network upgrades paving the way broadband growth.
DELHI
Capital not yet fully ready for digital transformation
- Kumar Vikram
The government is all set to enforce mandatory digitisation of cable TV from October 31, but the Capital is not fully ready for the transformation.
Around 40-45 per cent of the households are yet to get a Set Top Box STB). There is an estimated requirement of 45 lakh STBs.
The local cable operators (LCOs) are in a fix as the people, especially those living in small colonies and JJ clusters, are reluctant to install STBs. "They are adamant on not switching to STBs," Roop Sharma, president of the Cable Operators Federation of India (Cofi), said.
The LCOs charge Rs.25-50 per month for a connection, but the digital switch will make TV viewing relatively costly. The operators alleged that viewers had been kept in the dark about the hidden cost they will have pay every month, such as entertainment tax, service tax, VAT, STB rental and power consumption.
Anand Singh, an East Delhi resident, said: "I don't understand why the government is forcing us for this.
Apart from the STB, I will have to buy a new TV set as my old one is not supporting the digital feed." The cable operators in West Delhi have written to the Union government seeking police protection saying they feared violent reaction from viewers if their analog signals are switched off. The letter says: "The STBs which are being forced upon the consumers are of the cheapest variety without features such as video-ondemand, internet and games, with no maintenance facilities. The MSOs are asking them to pay more for the STBs now. Some are selling the boxes for as much as Rs.2,000. Millions of poor consumers do not have good quality TV sets to support digital feed." Cofi's Sharma said: "The last-mile cable operators are facing the public wrath despite the fact that they stand to lose the most."
MUMBAI
Cable operators warn of 'trouble'
-Aditi Raja
Even as the deadline for digitisation nears, Mumbai's cable operators have threatened to oppose the process unless the revenue model decided by TRAI takes care of their interest.
Most cable operators have stopped providing the STBs. The Cable Operators' Association, though, says that's because the MSOs that are supposed to provide the STBs to the cable operators for distribution to the viewers have delivered only about 20 per cent of the devices so far.
Anil Parab, president of the association, questioned the government's claim that almost 85 per cent homes were ready for digitisation. Only about 50 per cent homes had received the STBs so far, he said.
"The MSOs have not provided the desired number of devices.
It looks unlikely that things will be in place in the next four days," Parab said. "Moreover, we have not yet received a reply from the Centre on the issue of the LCOs' interest. That's why the process is on hold as of now." According to Parab, the Union government has not lived up to its promise to keep in mind the cable industry's interest. "They have decided the model of revenue only with the MSOs and are not even talking to us directly as the MSOs have now donned the role of cable operators. So, the actual role of LCOs narrows down to being 'fee-collectors'. This is not acceptable to us." Parab said in the event of a blackout, it was likely that consumers will agitate. "There might be a law and order problem if the issues are not resolved in time," he cautioned.
KOLKATA
STB shortage imperils plan
-Soudhriti Bhabani
Like Mumbai, residents of Kolkata, too, face the prospect of a blackout of their television screens.
According to Cable Operators' Digitisation Committee (CODC), an umbrella organisation of local cable operators in West Bengal, the digitisation would be practically impossible by October 31.
"About 38 lakh TV points covering 28 lakh cable-viewing households are slated to be digitised in the Kolkata Metropolitan Area (which covers Kolkata, Howrah district and parts of adjoining Hooghly, South 24-Parganas and North 24-Parganas). "But so far, only about 15 lakh STB have been supplied," CODC convener Alok Jana said.
He said the Centre was trying to force digitisation on the people even as it was not ready. "If the Centre forcibly tries to impose the plan, it would trigger a serious law and order problem," he said.
The state government has appealed to the Centre to extend the deadline till June 2013. The decision was taken following a meeting between the state urban development minister Firhad Hakim and the MSOs last month.
CHENNAI
Race to rule the Chennai sky
-M. C. Rajan
Doubts remain whether the city will achieve 100 per cent switch from analog to digital services, but the state government and the private MSOs are making hectic preparations.
Three days ago, Tamil Nadu chief minister J. Jayalalithaa launched the government's own cable TV service through the Arasu Cable TV Corporation. The state-run MSO service will aim at ending the monopoly of the Marans' Sumangali Cable Vision (SCV).
Arasu will distribute 8 lakh STBs. The MSO is targeting a huge 13-lakh subscriber base falling under the 2,000 LCOs who have applied for its signals.
The exact size of the Chennai market is not known, but the Marans rule the skies -with SCV and Sun Direct's DTH service. Other players such as Tata Sky, Reliance, Airtel and Videocon have also made some inroads into the market.
While Jayalalithaa says 8 lakh subscribers have registered with Arasu for STBs, SCV is going all-out to in a bid to maintain its dominance. Cable operators attached to SCV have assured to provide the STB to their subscribers at a concessional rate. The Maran's Sun Group is even offering concessions in SpiceJet tickets for those opting for Sun DTH packages.
Read more at: With three days left for cable television digitisation deadline, is India ready for a digital TV revolution? : India, News - India Today
With the digitisation of cable TV , the actual number of subscribers gets recorded through the set-top boxes (STBs) which contain a digital card with the user's address and details of his accounts, much like a bank debit card. There is a record of each set top box through which the signals are sent to individual homes.
The technology ensures that the broadcasters, the big distributors and the government get to know the exact number of subscribers. And this will enable the collection of service tax which has been leaking out under the analog cable system.
Most of the developed countries have phased out analog cable TV. While the US acquired complete digitisation of its cable TV sector in 2009, other countries such as China are rapidly following suit.
According to the latest study by leading consultants Media Partners Asia (MPA), India's pay-TV distribution market is on the cusp of a high growth value phase similar to North America between 1998 and 2003 and Korea during 2003-7.
MPA estimates show that continuing with the analog system would cause a revenue loss of $ 11 billion to the government over the next 10 years.
This puts the annual loss at around $ 1.1 billion which works out to well over Rs.5,500 crore a year.
According to MNA, the local cable operators (LCOs) that provide the last-mile connection to households report only 20 per cent of their total subscribers. Another study carried out by Rohit Dholakia of Batlivala & Karani Securities India Pvt Ltd has estimated that the LCOs are reporting only 15 to 20 per cent of the total subscribers.
Consumers also stand to gain from digitisation as the picture and sound quality will improve considerably. Tata Sky CEO Harit Nagpal said: "With digitisation coming in, consumers will have access to the latest technology embodied in high definition TV which will enhance the viewing experience. Consumers will also have the advantage of paying only for the channels that they want to watch and will have the additional choice of video on demand and catch-up TV as well."
LARGE digital distributors such as Hathway, DEN and IN Cable also end up losing big money under the analog cable system as they get a revenue share from a meagre 15 to 20 per cent of the subscribers. But with the digitisation of cable network, the earnings of multi system operators (MSOs) will go up as STBs ensure there is no under-invoicing by the LCOs.
Digitisation will also enable them to carry a larger number of channels as the capacity of an analog cable is much more limited.
Broadcasters are the other stakeholders getting shortchanged because of the under-reporting of subscribers. Most news channels are running into losses as they have to make huge investments preparing the news programmes and then bearing the entire cost of uplinking the content to the satellite from where is downloaded by the MSOs.
Indian news channels have to rely largely on advertisements, unlike channels in the advanced countries that earn the major chunk of their revenue through subscriptions from consumers.
According to MPA, digitisation should also help the government pursue India's broadband goals and thereby boost economic growth. A 10 per cent increase in broadband penetration would potentially increase India's GDP 1.5%. Broadband per capita penetration in India is currently a meagre 1% at present.
In its National Broadband Plan, the Telecom Regulatory Authority of India (Trai) clearly sees a pivotal role for cable operators in developing broadband infrastructure, with digital network upgrades paving the way broadband growth.
DELHI
Capital not yet fully ready for digital transformation
- Kumar Vikram
The government is all set to enforce mandatory digitisation of cable TV from October 31, but the Capital is not fully ready for the transformation.
Around 40-45 per cent of the households are yet to get a Set Top Box STB). There is an estimated requirement of 45 lakh STBs.
The local cable operators (LCOs) are in a fix as the people, especially those living in small colonies and JJ clusters, are reluctant to install STBs. "They are adamant on not switching to STBs," Roop Sharma, president of the Cable Operators Federation of India (Cofi), said.
The LCOs charge Rs.25-50 per month for a connection, but the digital switch will make TV viewing relatively costly. The operators alleged that viewers had been kept in the dark about the hidden cost they will have pay every month, such as entertainment tax, service tax, VAT, STB rental and power consumption.
Anand Singh, an East Delhi resident, said: "I don't understand why the government is forcing us for this.
Apart from the STB, I will have to buy a new TV set as my old one is not supporting the digital feed." The cable operators in West Delhi have written to the Union government seeking police protection saying they feared violent reaction from viewers if their analog signals are switched off. The letter says: "The STBs which are being forced upon the consumers are of the cheapest variety without features such as video-ondemand, internet and games, with no maintenance facilities. The MSOs are asking them to pay more for the STBs now. Some are selling the boxes for as much as Rs.2,000. Millions of poor consumers do not have good quality TV sets to support digital feed." Cofi's Sharma said: "The last-mile cable operators are facing the public wrath despite the fact that they stand to lose the most."
MUMBAI
Cable operators warn of 'trouble'
-Aditi Raja
Even as the deadline for digitisation nears, Mumbai's cable operators have threatened to oppose the process unless the revenue model decided by TRAI takes care of their interest.
Most cable operators have stopped providing the STBs. The Cable Operators' Association, though, says that's because the MSOs that are supposed to provide the STBs to the cable operators for distribution to the viewers have delivered only about 20 per cent of the devices so far.
Anil Parab, president of the association, questioned the government's claim that almost 85 per cent homes were ready for digitisation. Only about 50 per cent homes had received the STBs so far, he said.
"The MSOs have not provided the desired number of devices.
It looks unlikely that things will be in place in the next four days," Parab said. "Moreover, we have not yet received a reply from the Centre on the issue of the LCOs' interest. That's why the process is on hold as of now." According to Parab, the Union government has not lived up to its promise to keep in mind the cable industry's interest. "They have decided the model of revenue only with the MSOs and are not even talking to us directly as the MSOs have now donned the role of cable operators. So, the actual role of LCOs narrows down to being 'fee-collectors'. This is not acceptable to us." Parab said in the event of a blackout, it was likely that consumers will agitate. "There might be a law and order problem if the issues are not resolved in time," he cautioned.
KOLKATA
STB shortage imperils plan
-Soudhriti Bhabani
Like Mumbai, residents of Kolkata, too, face the prospect of a blackout of their television screens.
According to Cable Operators' Digitisation Committee (CODC), an umbrella organisation of local cable operators in West Bengal, the digitisation would be practically impossible by October 31.
"About 38 lakh TV points covering 28 lakh cable-viewing households are slated to be digitised in the Kolkata Metropolitan Area (which covers Kolkata, Howrah district and parts of adjoining Hooghly, South 24-Parganas and North 24-Parganas). "But so far, only about 15 lakh STB have been supplied," CODC convener Alok Jana said.
He said the Centre was trying to force digitisation on the people even as it was not ready. "If the Centre forcibly tries to impose the plan, it would trigger a serious law and order problem," he said.
The state government has appealed to the Centre to extend the deadline till June 2013. The decision was taken following a meeting between the state urban development minister Firhad Hakim and the MSOs last month.
CHENNAI
Race to rule the Chennai sky
-M. C. Rajan
Doubts remain whether the city will achieve 100 per cent switch from analog to digital services, but the state government and the private MSOs are making hectic preparations.
Three days ago, Tamil Nadu chief minister J. Jayalalithaa launched the government's own cable TV service through the Arasu Cable TV Corporation. The state-run MSO service will aim at ending the monopoly of the Marans' Sumangali Cable Vision (SCV).
Arasu will distribute 8 lakh STBs. The MSO is targeting a huge 13-lakh subscriber base falling under the 2,000 LCOs who have applied for its signals.
The exact size of the Chennai market is not known, but the Marans rule the skies -with SCV and Sun Direct's DTH service. Other players such as Tata Sky, Reliance, Airtel and Videocon have also made some inroads into the market.
While Jayalalithaa says 8 lakh subscribers have registered with Arasu for STBs, SCV is going all-out to in a bid to maintain its dominance. Cable operators attached to SCV have assured to provide the STB to their subscribers at a concessional rate. The Maran's Sun Group is even offering concessions in SpiceJet tickets for those opting for Sun DTH packages.
Read more at: With three days left for cable television digitisation deadline, is India ready for a digital TV revolution? : India, News - India Today
