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Digitisation extended by a year; industry settles to resolve issues
MUMBAI: The Narendra Modi-led BJP government has decided to extend the deadline for the digitisation of cable TV networks by a year.
The new deadline set by the government is December 2015 as a lot of groundwork needs to be done and various issues need to be resolved, Information & Broadcasting Ministry secretary Bimal Julka told TelevisionPost.com.
Why new govt gave extra time
The extra time was needed by the cable TV sector to get in equipment, obtain licences and permissions, Julka added. The preparation will mean procuring set-top boxes (STBs), digital headends and approvals required by smaller cable operators to operate with DAS (digital addressable system) licence.
“The previous government had left many processes incomplete. The decision to extend the deadline has been taken after consulting the stakeholders,” Julka said.
The UPA government had fixed 31 December 2014 as the sunset date for analogue cable in India.
Incidentally, this is the first major step taken by the new Information and Broadcasting minister Prakash Javadekar. In his early days as minister, he had tweeted: “Government to lay thrust on indigenous manufacture of set-top boxes. Digitisation deadlines may be relaxed if necessary”.
Though the first two phases of digitisation have been complete, the issues regarding revenue share between local cable operators (LCOs) and multi-system operators (MSOs), billing and packaging have to be resolved. According to industry experts, the business of digitisation has a long way to go.
Hathway Cable & Datacom MD and CEO Jagdish Kumar said that extension of the deadline was expected as compared to Phases I and II, there were a lot of things to be done. “In the midst of elections, obviously the task force meetings could not take place. There was no certainty about the deadline being sacred,” he said.
DEN Networks CEO SN Sharma said that the industry would get breathing space to resolve some of the issues that needed to be sorted out. “We are happy that there is clarity on the date and it shows that the new government is committed towards digitisation. There would be enough time for launching an awareness campaign ahead of the deadline.”
MSOs, DTH want split in deadline for Phase III and IV
Sharma said that it would be good if the government decides to fix June 2015 as the deadline for Phase III. “We could have two sets of deadlines. Phase III is more ready and June 2015 could be the deadline for it. 31 December 2015 could be the final sunset date for analogue cable.”
Kumar agreed that a split in deadline for Phase III and IV would help. “There are several cities in Phase III which are ready for digitisation. Areas neighbouring Delhi and Mumbai, for instance, could go in for an early round,” he said.
Direct-to-home (DTH) operators wanted no change in the Phase III deadline while the last round could have been shifted. “The postponement of both is a disappointment. Phase III should have been over by December 2014. The deadline for Phase IV could have been shifted. Then people would have come under pressure to buy STBs,” said Videocon d2h CEO Anil Khera.
New deadline to boost indigenisation of STBs
The new deadline will also give time for the local STB manufacturers to shape up their business. The Phases III and IV of digitisation will require 70 million STBs. Earlier, when asked about the 31 December 2014 deadline, Javadekar had said that for him more important is to give impetus to local industry. “I have met with local manufacturers already. Look at how many jobs it will generate.”
Javadekar had also invited suggestions from local manufacturers using his Twitter account. “I invite Indian manufacturers to produce and provide set-top boxes for indigenisation of digitisation.”
Sharma agreed that there would be a big opportunity for local STB manufacturers to flourish. “Indigenisation of STBs would mean a 10-15% drop in prices. It is good for the industry. Servicing will also improve,” he said.
Expansion plans to take a back seat
Will national MSOs slow down their investments? “We will continue to push for voluntary digitisation and focus on adding channels and improving quality of service,” Kumar said.
There is one area, however, where Kumar sees things slowing down for national MSOs. “Expansion plans will take a back seat. Cable operators who were unable to invest were willing to take feed from us. This kind of activity will stop now,” said Kumar.
Breather to resolve contentious issues
With several issues unresolved, the industry can use this time to find out solutions. “By stretching the deadline, the new government has done a good thing. There are many things to learn from the first two phases of digitisation and we should ensure that we do not repeat those mistakes. The MSO-LCO revenue share, billing and packaging issues should be resolved before we move to the last two phases of digitisation,” IndiaCast Group CEO Anuj Gandhi said.
Ortel Communications, which has presence in cities which fall under Phases III and IV of digitisation, has welcomed the decision of the government to extend the deadline to December 2015.
“This will allow adequate time to MSOs and LCOs to work on various aspects such as STB procurement at competitive pricing, agreements with broadcasters, implementing package and tiering at the consumer end, and mobilising resources to carry out this task. As far as Ortel is concerned, since we operate on a last mile model, we have always been ready for digitisation and are confident to meet any deadline fixed by the government. We remain committed to the process of digitisation and will continue converting analogue to digital on an ongoing basis,” said Ortel Communications president and CEO Bibhu Prasad Rath.