Chennai, Feb. 6: Though the Union Ministry of Information and Broadcasting says that metro cities (Delhi, Mumbai, Kolkata and Chennai) will become digital by June 30, 2012, it does not seem possible.

“We may miss the deadline as it calls for an investment to the tune of Rs 300 crore to procure set-top boxes, set up head-ends and control rooms,” said Mr D. Vivekanandan, Managing Director, Tamil Nadu Arasu Cable TV Corporation Ltd.

According to him, though the State Government is not against the digitisation, the delay may be indispensible. The Government, in fact, is yet to make a policy decision on this, he said. As far as the optical fibre cable networking is concerned, “We can hire cable bandwidth from the telecom operators in the city who already have established cable network here. But procuring set-top boxes could be an issue.” He said there are a little over 25 lakh C&S (cable and satellite) homes in Chennai. Of this, 2.5 lakh homes have DTH connections, and another 2.5 lakh homes have cable connections with set-top boxes. “This leaves a whopping 20 lakh homes to be provided with set-top boxes in the next five months, which seems not workable,” he said.

Arasu Cable recently took a decision to foray into the city, following which close to 2,000 LCOs (local cable operators) with a subscriber base of 8.75 lakh, have registered with the corporation. Overall, in the State, 1.13 crore subscribers have registered with the corporation. Of this, 35 lakh homes are already connected, “and we are adding a few thousands every day. Before the end of next month, the number will double,” he said.

With the Raj TV bouquet, which came on board very recently, it carries a total of 97 pay channels and over 50 free-to-air channels. “The talks with Sun TV is still on, and we hope to get them on board too,” said Mr Vivekanandan.

Source: The Hindu Business Line

With the official deadline for phasing out analog cable TV services fast approaching, digital cable and direct-to-home (DTH) companies are worried because customers are not adequately aware about the mandatory need to switch over to digital services, which will lead to a last minute scramble for settop boxes.

Senior industry executives told Mail Today that although digital customers have been growing, there seems to be lack of awareness about the government’s decision to phase out cable TV networks from Delhi, Mumbai, Kolkata and Chennai by June 31, 2012. Noida and Gurgaon are next in line and compulsory digitisation will be enforced by March 31, 2013.

“There should have been a surge in numbers for the digital services after the government decision in November, 2011, but this has not happened,” a senior executive said.

These companies fear that consumers will probably rush for the change in the last month, when it would become difficult for them to install such a large number of connections in a short time-frame.

The distribution companies had stepped up imports of set-top boxes since they are not manufactured in India but are now seeing the inventory piling up.

The government is keen on the switch over as there is largescale under-invoicing by the local cable operators, who provide the last-mile connection to households and this leads to an erosions in service tax revenues.

According to industry estimates, these neighbourhood cable operators report only 20 per cent of the total subscribers from whom they actually collect money each month.

As a result the government ends up losing around Rs.5,000 crore each year in service tax.

The large digital distributors, such as Hathway, DEN and Digicable, also end up losing big money as they get a revenue share from a meager 18 to 25 per cent of the actual number of subscribers.

According to an industry estimate, the local cable operators retain 80 per cent or Rs.13,600 crore of the entire collection of Rs.17,000 crore collected from viewers as subscription.

The television broadcasters, who invest heavily to provide entertainment and news content, are also getting shortchanged because of this under reporting of subscribers. The digital switch will ensure that the actual number of subscribers get recorded through the set top boxes, which contain cash card with the details of the accounts of the user.

The technology ensures that the broadcasters, distributors and the government get a fix on the actual number of subscribers, plugging the revenue leak. Most advanced countries have phase out analog cable TV. While the US completes the digitisation of its cable sector in 2009, other countries like China are also following suit.

Tata Sky chief marketing officer Vikram Mehra told Mail Today that the company had geared up to provide set-top boxes in the four metros keeping in mind the June 30 deadline. “However, consumer awareness is still low and we plan to launch an advertising campaign to apprise potential customers,” he added.

Mehra said it was important for consumers to choose the right kind of set-top box as this would affect the quality of viewing.

Industry officials are of the view that apart from the number of set-top boxes, the problem of installing the connections had to be tackled.

Installation requires technical expertise and skilled manpower have to be made available in adequate numbers. Thus, any last minute surge in volumes would also make it difficult for company’s engineers to cater to the customers within a deadline.

Mehra said Tata Sky was also putting its billing systems in place to cater to wider customer base as with the entry of set-top boxes consumers would be choosing channels on a la carte basis, which would require different bills for diverse viewers.

A digital platform offers a wider choice of TV channels, better quality of transmission and allows consumers to pay for what they view. For the industry, it will bring in greater consolidation, reduced dependence on viewership ratings and drop in carriage fees.

Source: India Today

SITI Cable organized business partners meets to set the pace of cable TV digitization, with the Government recently passing the Cable Television Networks (Regulation) Amendment Bill requiring the four metros Delhi, Mumbai, Kolkata and Chennai to shift to digital cable by June 2012 and the rest of the country to be digitized in phased wise manner by December 2014.

With this bill, the onus shifts now on cable service providers to gear up for shifting to digital cable TV infrastructure from analogue.

To speed up this transition, SITI cable organized the series of meets for Delhi Cable Operator in groups of hundred. These meetings were aimed at orienting the local cable operators (LCO’s) towards digital addressable systems (DAS) and its benefits.

In a scenario where consumers have access to newer technologies such as DTH, IPTV which are bringing in superior quality and service & changing the rules of media distribution, the digital addressable systems can offer more TV channels to the consumers with better quality picture and sound, attractive channel package offerings, HD Channels and TV signals that remain uninterrupted even in bad weather.

DAS will also enable cable operators to tap additional business opportunities in the form of value-added and interactive services. It has the provision of broadband and triple-play services through the network which will help in boosting up the revenue of the Cable Operators.

The issues related to the up gradation of existing networks, technical support and training in implementing the system, commercials involved etc were discussed during the meeting.

Team SITI Cable has also explained the Subscriber management system which gives full independence to the business partners in managing their set of subscribers and allows them to addresses activation, deactivation, package change request, complaints etc of the subscribers. The most advanced IP based digital head end set up by SITI Cable will deliver 400 channels along with 30 HD channels in the initial phase. This head end is equipped to deliver up to 1000 channels apart from providing VAS like gaming, movie on demand etc too.

Addressing the gatherings Mr. Anil Malhotra, COO of WWIL said that, “The objective behind developing such Subscriber management system (SMS) is to empower the business partners, the most critical stakeholder in the value chain. The developed system is the replica of the present model of analog business with improved services on digital platform.”

He further added, “Digitization doesn’t mean just putting set top boxes in every cable television home. Lot of work needs to happen in terms of back-end, technology, systems, processes etc. He explained this is precisely what SITI cable have been doing for last few quarters building on infrastructure and backend system & processes. In our areas, we will ensure 360 degree process for migrating to digitization. We are in a very good shape to take off.”

During the meet Business partners of Delhi have also visited SITI cable most advanced IP based digital head end & other infrastructure.

In a nutshell digitization is the lifetime opportunity for cable service providers to increase revenue by offering more channels and VAS, to compete with alternate technologies and build the long term relationship with the end consumers.

SITI Cable will organize more such business partner’s meets in various other cities as well, to build the awareness about digitization.

NEW DELHI/MUMBAI: Five months before time runs out for homes across India’s top four metros to switch to digital transmission to continue watching cable television, operators are battling short supply of set-top boxes as well as ignorance among consumers.

More than 60,000 set-top boxes need to be installed every day to enable an estimated 10 million homes across Delhi, Mumbai, Chennai and Kolkata to meet the deadline mandated by the government.

But with India going digital at the same time as Brazil, Russia, China and South Korea, among other countries, set-top box makers are finding it difficult to meet delivery deadlines. This is the case even as most leading manufacturers, based in China, have ramped up production manifold.

“Most consumers don’t even know that they won’t be able to watch TV with the same cable after the June 30 deadline and that a digital set-top box is a must,” says Anthony Brian D’Souza, a Mumbai-based cable operator.

Direct-to-home or DTH operators, who use satellite and dish antennae, are therefore well placed to grab the business from cable operators. Nearly 80% of the 70,000 odd cable operators are believed to be independent players, who are also finding it difficult to absorb the rise in the cost of imported set-top boxes due to rupee depreciation.

“This is a great opportunity and we are well poised to make the most of cable digitalisation,” says Dish TV’s managing director Jawahar Goel, “The DTH industry will be able to grab 30%-70% of the analog cable homes across various phases depending on the locations.”

Tata Sky has also geared up to cash in on the opportunity. “Our billing and CRM systems handle millions of customers. These have been further scaled up to ensure error free service to many more millions of new subscribers who will join us in next few months,” says chief executive officer and managing director Harit Nagpal. The company can install fresh connections within a day of receiving the order, he says.

Big multi-system operators like Den Networks and Hathaway Cable & Datacom, which have too much on their plate upgrading their subscribers, might find it difficult to add too many new subscribers.

Den Networks has hired Ernst & Young to conduct seminars and train its partners and affiliate local cable operators. “Local cable operators will help us upgrade our existing consumer base on the ground and will play an important part in the process,” says Sameer Manchanda, CMD of Den Networks. He says the company will focus on upgrading its current subscribers in the four metros.

While the industry expects a majority of independent operators to align with the bigger players, many of them may find the switch hard to survive. “The large investments expected from cable operators for setting up the infrastructure in such a short span of time and competition from DTH players could create unemployment among smaller cable operators,” says Roop Sharma, president Cable Operators Federation of India, the largest association of independent cable operators in the country.

Sharma, however, says even the bigger players might find it hard to prove equal to the challenge. “Digitalisation is a mammoth task and there are concerns whether the deadline for the four metros will be achieved,” he says.

An independent cable operator says many affiliate partners of the bigger players are showing a huge resistance to digitisation at the moment. “If someone in the cable fraternity keeps holding out till the last moment in the hope that digitalisation will not happen, he will only be making it easier for DTH players to garner incremental market share at the cost of the cable industry,” says K Jayaraman, chief executive officer of Hathway Cable & Datacom.

Source: The Economic Times

Since the cable TV industry’s stunningly chaotic beginning in India in the mid-90s, those in this vast and unregulated trade have had a free run. In the absence of government regulation and its accessory, red-tape — the Indian cable industry has managed to climb to number three position in the world. But the coming summer, things are in for a shake-up.

The centre has approved the Cable TV Networks (Regulation) Amendment Bill, 2011, which proposes to make it mandatory for every household in the metro cities (in phase one) — Mumbai, Chennai, Delhi and Kolkata — to have a set-top box, digitising the entire technology. This will set the pitch to bring in transparency to a trade currently distended with black money, and glorying in the attentions of the underworld.

Industry regulator TRAI has proposed the four-phase migration from analog cable TV to a fully digital addressable system, starting with the four metros, by June 2012.

Huge revenue
Of course, the move, which has long been resisted by the cable mafia, and with good reason, will spell doom for them. Namrata Sharma, trade analyst with M/s Pioneer Invest Corp, who recently completed a cable and satellite industry market survey report, explains the repercussions through numbers.

“The Indian cable industry is worth Rs 270 billion and is the third largest in the world after China and the US. The number of TV homes in India grew from 120 million in 2007 to 148 million today. Cable reaches 94 million homes with 88 million analog connections and 6 million digital ones, while DTH has commanded 41 million subscribers,” she stated.

Of these 88 million analog households in the country, local cable operators (LCOs), who were charging Rs 160 per month, rake in approximately Rs 170 billion in revenue. Nearly 80 per cent of this — around Rs 136 billion — is retained by the LCOs, and a mere 20 per cent, or Rs 34 billion, is declared, and half of the declared revenue, that is Rs 17 billion, is passed on to broadcasters to meet content cost.

Crime at bay
Joint Commissioner of Police (Crime) Himanshu Roy said, “Any rationalisation of the cable industry will bring transparency and better regulation will reduce the influence of the underworld on the industry. It is a welcome step, as the underworld is active in getting connections, keeping the number of connections intact. If there are set-top boxes and the consumer has individual choice, the bad characters can be kept at bay.”

Panacea!
A senior Telecom Regulatory Authority of India (TRAI) official said, “We were receiving a lot of complaints from MSOs and consumers as the LCOs were directly operating at the end-user level, and there was no transparency. The new bill will make the entire cable and satellite industry transparent. The Indian government loses more than $1 billion per annum in taxes due to under-declaration.”

“While TRAI will remain the governing body, district magistrates, sub-divisional magistrates and police commissioners have to ensure that at ground level the cable operators implement the order. In case of any violation, the authorities are empowered to take action as prescribed in the Cable Television Networks (Regulation) Act, 1995 against the violators.”

Vikram Mehra, chief marketing officer, Tata Sky said, “A digitised India promises a win-win situation for all the stakeholders, the government, broadcasters, MSOs, and direct-to-home (DTH) operators, in terms of revenue. And it is fair to say that the ultimate beneficiary will be the customer, who will get an enhanced TV viewing experience.”

Fad of ads to fade?
Media consultant Sainath Iyer said, “High cost of advertising on TV channels is expected to be a thing of the past as increased revenues from subscribers are expected to make up for revenue and bring down the advertising tariffs of broadcasting television companies.”

“So far, advertising was the key driver for broadcaster revenue of around 80%, as conventional analog cable distribution, due to their inability to grow subscription pie adequately plagued by under-declaration of subscriber base by the local cable operator. Under the present system, the local cable operators retain 80% or Rs 13,600 crore out of the entire collection of Rs 17,000 crore collected from viewers as subscription,” he said.

Source: Mid-day.com

With digitisation of the cable TV industry in India soon reaching its sunset date, MSOs are making large capital expenditures to provide STBs (set top boxes) to their subscribers. However, with few significant revenue opportunities, VAS is becoming an important strategy by which operators increase their revenues and profits. VAS brings in multiple opportunities, some of them in the form of video-on-demand, video conferencing, local classifieds listing, TV-commerce, games, viewership measurement, and advertising.

To begin with, approximately 50 MSOs across India have partnered with local television advertising specialist Amagi Media, wherein the latter will bring in its patent-pending technology, work flow and business model to generate local advertising on satellite TV channels; this, in turn, will leverage the existing cable MSO infrastructure. The partnership includes names such as Hathway, InCable, Digicable, GTPL, Fastway Cable, and Manthan.

Explaining the process to afaqs!, K A Srinivasan, co-founder, Amagi Media, says, “Amagi provides city-level advertising on national TV channels. This is done by using its unique and patent-pending technology, and an innovative business model. It buys media inventory from TV channels, disaggregates and sells TV ad spots at city-level. For city-level targeting, Amagi partners with cable MSOs, places its technology box at cable head-ends, and delivers city-level advertising to advertisers.”

“Amagi pays a share of the revenues to cable MSOs. There is zero investment from cable operators to enable this service and they get to participate in advertising revenues,” he adds.

In India, ARPU (average realisation per user) of TV subscribers is the lowest in the world. This forces operators to explore opportunities outside subscription revenues for growth.

An MSO operator, on conditions of anonymity, explains that cable MSOs have significant advantage with respect to DTH providers in terms of local access, ability to provide reverse data path, and the possibility of multiple services (telephony, internet and TV) to be piped over the existing infrastructure. “By far, advertising is the most promising prospect, as it comes without large additional expenses. Advertising at regional level leverages the inherent benefit of local addressability that cable TV provides,” he says.

Pinank Vin, vice-president, Gujarat Telelink Pvt Ltd (GTPL), says, “Given that ARPUs from subscribers are limited, it is critical for MSOs to explore other avenues to leverage their access to subscribers. This concept of generating local advertising for MSOs is new, but it is worth a try as it will help us generate additional revenues.”

According to industry experts, this local advertising on satellite TV channels is a $6 billion revenue earner in the US, which is 15 per cent of all TV advertising revenue in the country.

Source: afaqs!

Talks under way for partnership model to provide last-mile connectivity to 4G users.

Reliance Industries (RIL) is planning to pick up a minimum 26 per cent stake in leading cable operators, including multi-system operators. The move is a part of the group’s strategy to rope in cable operators as well as multi-system operators (MSOs) as partners to provide last-mile connectivity to consumer homes for 4G broadband services, which would include data, voice and television.

According to two independent sources, RIL has approached Den Networks, Digicable Networks, Hathway Cable, the Hinduja–promoted IndusInd Media and Communications Ltd (InCable) and several independent MSOs as well as smaller operators with good regional presence. There are more than 6,000 cable operators in the country.

The move comes shortly after RIL decided to invest in media group TV18′s two main companies through rights issues. The deal would give RIL access to content for its 4G broadband internet venture.

RIL had last year bought 95 per cent stake in the Mahendra Nahata-promoted Infotel Broadband Services Ltd (IBSL), which won broadband wireless access or 4G spectrum across the country.

Elaborating on its strategy, an RIL spokesperson said Infotel was engaged in bringing affordable, cutting-edge wireless broadband and broadband-enabled digital services to customers across the country. To support this business model, Infotel is pursuing an economically prudent strategy of deploying a judicious mix of owned and partnered assets. In this context, the spokesperson said, Infotel had, and continued to be, engaged in discussions with potential partners where a partnered approach could create win-win opportunities for the company, its customers and partners.

RIL, however, did not want to comment on specific names, given the “strategic and confidential nature” of the discussions.

The MSOs and cable operators also declined to comment on talks with RIL. Sameer Manchanda, chairman and managing director of Den Networks, Ravi Mansukhani, managing director of Indusind Media, and K Jayaraman, CEO of Hathway Cable & Datacom, declined to comment on the issue.

With the government setting a deadline for digitisation by 2012 in metros and by 2014 across the country, cable operators and MSOs would require a massive investment of Rs 25,000 crore.

Den Networks plans to invest Rs 1,500 crore over three years and Hathway had said it would invest Rs 500-600 crore on cable digitisation in the first phase. According to analysts, most MSOs have chalked out huge fund-raising plans for digitisation, including stake sales.

According to a KPMG report on the media and entertainment industry, there were 103 million cable homes in 2010. Of those, 68 million were connected by analogue cables, while 28 million used DTH and five million switched to digital cable.

With RIL planning to roll out 4G services, tying up with MSOs will help them both in data and content options. That will help them in mass-scale adoption of their technology. In one go, most households will get internet and content on several devices from television to tablets. For RIL, this makes sense as MSOs have last-mile access to customers, says Farokh Balsara, leader of media and entertainment practice at Ernst & Young (Europe, India, Middle East and Africa).

RIL watchers say the company has put together an elaborate 4G broadband wireless access (BWA) roll-out plan that will offer consumers speeds 5-10 times better than 3G.

RIL has ambitious plans to connect over 100 cities and towns across the country through a fibre optic network (partly of its own and partly leased) in the initial stages. Cable operators and MSOs together have already laid 100,000 km of fibre reaching consumers’ houses across the country. That is what RIL wants to leverage.

The senior Ambani may have to tackle some regulatory issues of cross-holding under which cable, broadcasting and DTH companies cannot hold more than 20 per cent stake in each other. It was for this reason the Anil Ambani-promoted RCom, which operates in the DTH space through Reliance Digital TV, internet protocol TV (IPTV) and broadband services (all come under Reliance Digicom), was unable to acquire cable company Digicable. The government had earlier looked into the structure of Sun TV and the Zee group as both are present in an array of areas — cable distribution, DTH and broadcasting. But, they got clearance.

Source: Business Standard

Kolkata, Jan 13 (PTI) Leading Multi System Operator (MSO) Digicable today said they will invest Rs 225 crore to supply 1.5 million settop boxes to its subscribers in the city. “All cable operators have to mandatorily switch to digital technology or to send cable television signals through settop boxes (STB) from July in city. We are trying to offer a cheap solution to subscribers under our network,” Digicable VP Amit Nag said. Digicable managing director Jagjit S Kohli said the company was planning to offer STB at Rs 500 though the minimum price of a box is Rs 1700. “We have to subsidise to make it affordable,” he said. There are four large MSOs in the city and the exact number of cable connections is not known but according to estimates the number would be around four million. Digicable said the company was trying to offer 200 channels at the current price though it would be finalised after government comes out with pricing for the basic service. Kohli said digitisation will offer huge benefit to consumers and it would be better than DTH.

Source: IBNLive.com

MUMBAI: India’s leading multi-system operator (MSO) Hathway Cable & Datacom plans to invest Rs 1.75 billion in the first phase of digitisation even as it expects DTH to take away 10-15 per cent of its cable TV subscribers in the two lucrative markets of Delhi and Mumbai.

Hathway has ordered 1.3 million digital set-top boxes (STBs) and signed a letter of intent for another 0.5 million STBs.

“We estimate our subscriber universe to be 1.5 million (including 2nd TV) in Mumbai and Delhi. About 20 per cent of this will be second TV sets. We have a presence in Kolkata through our joint venture company and expect to seed 200,000-300,000 boxes there,” said Hathway Cable & Datacom MD and CEO K Jayaraman in an interview with Indiantelevision.com.

Hathway has already seeded 250,000 STBs on a voluntary basis in Delhi and Mumbai.

The STBs will be subsidised and sold to customers at a price of Rs 750-790 (including taxes). “We will not sell below this even if there is a price war. We, however, feel that no player is in a position to indulge in a price war. DTH will fight for market share on the basis of perception and brand. All the Santa Clauses are broke,” said
Jayaraman.

Hathway will do fixed fee deals with broadcasters and content cost in a digital environment is expected to fall in the region of 35 per cent. The local cable operators (LCOs) will get a revenue share of 30-35 per cent and the distributors five per cent. Distributors are to also get a 30 per cent share in carriage revenues. “In Mumbai, we are comfortable with the distributors. There may be some issues in Delhi but we will manage to strike a smooth bond with them,” said Jayaraman.

Carriage income is expected to shrink by 30 per cent in the digital environment. “This can even go up to 50 per cent. But we will be somewhat compensated by a reduction in content cost,” averred Jayaraman.

Hathway has a cash pile of Rs 2 billion and does not feel the need to raise capital in the first phase of digitisation. “We will manage with bank debt, vendor and buyer’s credit,” said Jayaraman.

For the first time, Hathway will splurge on marketing. The MSO has earmarked a spend of Rs 250 million towards advertising and the first campaign will break on 6 January.

Hathway expects to stay Ebitda positive while net losses will drag on till at least 2016. “We will regain good valuations if we manage to seed the boxes. Investors are bothered about that and not about net profitability at this stage. We expect our Ebitda to be at least in the 20-25 per cent range. We know it will be difficult at the early stage of digitisation but our endeavour will be towards achieving that range from the start,” said Jayaraman.

Hathway expects the ride in the second phase to be even smoother as it has already got a large population of digital subscribers on a voluntary basis in some of these major cities like Bangalore and Hyderabad. “The second phase is looking even more promising for us,” said Jayaraman.

Source: Indiantelevision.com

NEW DELHI: Cable TV companies Den Networks and Hathway Cable & Datacom will launch a joint media campaign beginning with Delhi this weekend, informing consumers about the need to install set-top boxes by June 30 as mandated by the government.

The top two multi-system operators (MSOs) will also launch their set-top boxes at a promotional price of Rs 799, including installation charges and taxes, which is much lower than Rs 1,500-1,600 charged by the direct-to-home or DTH operators.

As per initial estimates, the two companies are expected to spend Rs 20 crore on the campaign. Households in New Delhi, Mumbai, Chennai and Kolkata will have to buy set-top boxes before June 30 to watch television channels, as per the government’s plan to digitise the country’s cable TV network by 2014. Both houses of Parliament passed the Bill to this effect last month.

“Consumers need to start buying the set-top boxes to access digital signals and this is a joint effort by two like-minded companies to make the consumers aware about digitisation,” said SN Sharma, CEO of DEN Networks. The company expects to install between 2 and 2.5 million set-top boxes in the four cities. “The initial goal will be to upgrade our existing subscribers in these cities to digital addressable system. Only if we have surplus boxes will we look to add new subscribers,” he said.

Hathway expects to deploy about 2 million set-top boxes in the four cities by the end of the first phase. The two companies are planning to rope in other MSOs for the campaign partly to share costs and fend off competition from DTH players. “This is an educational campaign and we think it’s best if all players come together to share costs and promote digitisation,” said K Jayaraman, CEO, Hathway Cable & Datacom.

Source: The Economic Times