New Delhi: Not satisfied with the ‘must carry’ diktat and regulation of carriage fee outlined in the latest regulations by the broadcast regulator, both multi-service operators (MSOs) and news broadcasters may soon take legal recourse. MSOs and broadcasters are studying the order before approaching the courts, sources said.

On Monday night, the Telecom Regulatory Authority of India (Trai) issued the tariff order and regulations for digital addressable system (DAS) roll out mandating every MSO to upgrade its delivery platform so as to carry 500 channels in DAS areas, starting with the four metros. DAS entails mandatory use of a digitally addressable set-top-box for accessing TV channels and encryption of all television signals in DAS notified areas.

“The tariff order applies equally to DTH service providers and MSOs. No such ‘must carry’ mandate is imposed on DTH operators. The Trai orders directly attacks every MSOs right to do business. This should be challenged in court,” said a top executive in MSO Alliance, the apex body of leading MSOs.

News Broadcasters Association, the apex body of leading news channels too as expressed its displeasure accusing the sector regulator of legalising the menace of carriage fees when DAS in itself is supposed to eliminate it.

Both Trai and the ministry of information and broadcasting have supported the move. Trai chairman J S Sarma ruled out any roll back of the DAS order. Sarma told a news channel that Trai does not issue regulations and tariff order to roll back or re-look at them the next day. On its part, Uday Kumar Varma, Secretary, I&B ministry told FE that the DAS order was balanced and pro-consumer.

But MSOs are not satisfied. “It costs a lot to upgrade the network and digital head-ends in order to make them ready for carrying 500 channels. While there may be a demand for these many channels in metros and bigger towns, no such demand is there in smaller towns. This directly impacts the fundamental right of doing business,” said the head of regulatory and legal affairs in a leading MSO brand requesting anonymity as the matter was still be discussed internally.

Even the markets welcomed the Trai order as the stocks of MSOs like DEN, Hathway and WWIL went up by 2.12%, 19.23%, and 4.73% respectively. However, the stocks of some broadcasters took a beating. News broadcasters like NDTV -0.84%, Zee News (-2.31%), and TV Today (unchanged), while general entertainment channels like Zee Entertainment closed in the red while Sun TV saw 5% gain.

Source: The Financial Express

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

NDS has announced that in the rapidly growing Indian pay-TV market its technology is providing an enhanced TV viewing experience in 20 million homes. With an industry estimated average of five people per households, NDS is enabling a compelling, next-generation TV experience for 100 million viewers; a milestone that reinforces the company’s position as the leading supplier of digital pay-TV solutions in India.

Sue Taylor, Senior Vice President and General Manager, NDS Asia Pacific said, “We entered the Indian pay-TV market in 1995 and this latest milestone is a testament to not only our pioneering work with some of the most successful cable TV and satellite platforms in India, but also to the remarkable growth in the India pay-TV market.”

“India is expected to overtake the US in the number of DTH homes within the next year and we’re committed to helping operators introduce next-generation applications that will continue to enhance their subscriber offering. As India’s leading digital cable TV solutions provider, we are dedicated to developing a full suite of affordable, scalable and future-ready solutions for operators who want to digitise their networks to maintain a competitive advantage,” added Taylor.

With offices in Delhi, Mumbai and Bangalore NDS has invested over US$250 million in India; the company currently employs over 1,900 people in India with its largest presence an R&D centre in Bangalore. NDS has established relationships with leading pay-TV operators throughout the country, including Tata Sky and Airtel Digital TV in the DTH sector and DEN, Hathway and the newly announced Darsh Digital and Jak Communications in the cable sector.

Source: BestMediaInfo.com

In a move that will ensure that the cost of cable channels will continue to remain affordable for consumers even after shifting from analogue to digital services, the Supreme Court last week ordered a new tariff formula for all digital addressable platforms.

The apex court has fixed 42 per cent of non-CAS tariffs as the new benchmark for all future commercial agreements between broadcasters, direct-to-home (DTH) firms and MSOs offering digital cable services. This formula will now replace the earlier tariff orders (35 per cent by Trai in July 2010 and 50 per cent by TDSAT in July 2006).

Simply put, this means that DTH, digital cable, and IPTV operators will only pay the broadcasters up to 42 per cent of the tariff fixed in the analogue cable market (non-addressable and un-regulated). This is important because the government has recently oulined December 31, 2014 as the cut-off date for shifting to digital and addressable cable services.

Experts said the new order will not have much impact on the DTH operators as most of them have signed long-term commercial deals with the broadcasters. However, this will help the MSOs get into agreements with broadcasters under a well-defined commercial formula.

The apex court gave the interim-order while hearing a plea of the Telecom Regulatory Authority of India (Trai). The broadcast regulator had gone to SC challenging a TDSAT judgement of December 2010 which had set aside its 35 per cent tariff order for DTH platform. The Trai’s 35 per cent tariff formula was opposed by most broadcasters.

A bench comprising justices RV Raveendran and AK Patnaik stayed the order of the Telecom Disputes Settlement & Appellate Tribunal (TDSAT), which had set aside Trai’s notification of July 21.

While most MSOs and DTH operators have welcomed the move, the new formula will impact the margins of broadcasters and DTH operators as they will realise lower revenue from digitally addressable homes, experts said.

“The court’s order has removed the tariff-hurdles in the path of digitalisation. As we move towards the complete digitalisation of the cable services, the 42 per cent tariff formula will help all stakeholders in coming years,” said Ashok Mansukhani, president, MSO Alliance, the apex body of leading Multi-Service Operators (MSO).

A top executive of a leading MSO firm said the 42 per cent tariff order will drastically reduce the litigations between broadcasters and cable distributing firms. “Also, there will be a five to six fold jump in the subscription declaration as a result of digitalisation and the clear tariff formula on digital platforms,” the MSO said.

The Shares of Dish TV tumbled as much as 6.5 per cent after the news of SC’s new tariff formula came out. At the close of trading hours on Monday, Dish TV’s stocks were down 2.49 per cent. In contrast, the scrips of MSOs like DEN (5.63 per cent), Hathways (9.87 per cent) and WWIL (4.44 per cent) saw upward movement.

Before the Trai’s 35 per cent tariff order proposal, all commercial deals between broadcasters and DTH operators materialised at 50 per cent of non-CAS rates (a formula given by a 2006 TDSAT judgement). However, in July last year, Trai, after consultation with the stakeholders, had came out with a new tariff order fixing the tariffs on DTH at 35 per cent of the non-CAS rates. This was challenged by most cable distribution firms and broadcasters. In December 2010, TDSAT set aside the Trai’s 35 per cent tariff order.

According to the earlier (50 per cent of non-CAS rates) formula, a channel costing Rs 50/subscriber in non-CAS areas (most of India) was to be priced upto Rs 25/subscriber on the DTH/digital cable platform (50 per cent formula). Now the same channel will can not be priced beyond Rs 21 (42 per cent formula as per SC’s interim order).

Source: Indian Express

Shares of Hathway Cable and Den Networks jumped after telecom cum broadcasting regulator TRAI said that all cable operators need to switch to digital systems by December 2013.

Shares of DTH operators Dish TV and Sun TV also gained amid optimism that the TRAI ruling may prompt many consumers to opt for DTH services.

TRAI said that all-India digitalisation of cable television should be implemented in four phases. Cable operators in the four metro cities Delhi, Mumbai, Kolkata and Chennai should switch to digital cable systems as early as March, 2011.

In the second phase, all cities with population of over one million should turn digital by December 2011. This should be followed by digitalisation of cable television systems in all the urban areas by December 2012.

TRAI said that all cable operators in the country should switch from analogue to digital systems by December 2013.

The regulator said that digital cable television systems will enable television viewers to receive high quality television signals of their choice and have the option to subscribe to channels on A-La-Carte basis. In addition, it will ensure access to many more channels in comparison with analogue cable.

Source: India Infoline Ltd.

MUMBAI: Sameer Manchanda-promoted Den Networks will continue to grow in size this year, building up a revenue nest of Rs 11.50 billion as it consolidates its subsidiaries.

The multi-system operator (MSO) with a pan-India footprint will, thus, see a 25 per cent revenue upswing over the earlier year.

Carriage revenue from broadcasters, standing at almost Rs 2 billion in FY’10, will see a 10-15 per cent growth in the fiscal.

The company expects its operating profits to jump over 50 per cent to Rs 1.60 billion.

“We will see the full impact of the subsidiaries this year. The carriage market is also picking up. Our targets are well within achievable reach,” says Den Networks president – strategy and business development M G Azhar.

The fourth-quarter financials of FY’10 are an indicator of Den’s growth this fiscal. The company posted a revenue of Rs 2.46 billion and operating profit of Rs 320 million. “We had almost consolidated all our subsidiaries which reflected in our fourth-quarter results,” says Azhar.

Den plans to invest Rs 1.50 billion during the current fiscal even as it intends to speed up its digitisation drive.

The MSO will pump in over Rs 1 billion as it expects to add 700,000-800,000 digital subscribers during the fiscal. Den already has 425,000 digital subscribers.

Den will also put in one-fourth of its year’s investments towards acquisition of cable networks.

“We have an investment plan of Rs 1.50 billion in FY’11. We hope to cross one million digital subscribers by then,” says Azhar.

Source: Indiantelevision.com

Couch surfing has become more than passive television viewing over the past decade. Indian TV sets now have DVD-like picture quality with loads of value add-ons thanks to new technologies like DTH, CAS and IPTV.

Idiot box goes digital

The country has about 130 million television households, including 96 million Cable & Satellite (C&S) homes. As per TAM, average time spent watching television per day was 153 minutes in 2008

Direct-to-home (DTH): DTH consumers receive digital TV channels’ signals through satellite on their dish antennae which are then transmitted to TV through a set top box (STB)

There are seven players and an estimated 20 million subscribers. Dish TV is the market leader; the others are Tata Sky, Sun TV, DD, Big TV, Airtel digital television and the latest entrant, Videocon’s D2H.

The industry expects at least 40% C&S homes to turn DTH subscribers by 2015

DTH offers pay per view where consumers get access to the latest movies for just Rs 75-100

Conditional Access System (CAS)& digital cable: Cable operators use CAS to compete with DTH, where content is beamed to consumers through STBs. But it is limited to parts of New Delhi, Mumbai and Kolkata. The government is yet to come out with a policy to extend it to other cities

The cable industry remains fragmented. Large multi system operators include WWIL, Hathway and Incablenet besides new generation firms, DEN and Digicable

The government recently announced a headend-in-the-sky policy, allowing MSOs to send signals to local operators through satellite. While it will expedite digitalisation, there are still some loose ends

IPTV: Internet Protocol Television allows subscribers to get television content through broadband internet. MTNL, BSNL and Bharti Airtel are offering this service. IPTV is also a digital service offering more channels and interactive services. It is yet to catch up in India

ET Comment

Connect the dots

Several countries have switched to digital television signals, which is where India still has a long way to go. The government needs to encourage faster digitalisation with clear policies on technologies like CAS. The television viewer will eventually benefit as he will get access to better picture quality, a larger number of channels and more control over what he wants to watch. But the big question is, how long will DTH and cable companies survive on the relatively lower levels of ‘average revenue per user’? Indians’ average monthly spend on pay television services is $3.5 compared to $15 spent by Americans.

Source: The Economic Times