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MSOs to be in financial pain till foolproof digitisation: Mansukhani

MUMBAI: Independent multi-system operators (MSOs) will be under financial stress till the entire digitisation process is complete in the 41 cities (Chennai excluded) covered under phase I and II, says IndusInd Media & Communications Ltd (IMCL) managing director Ravi Mansukhani.

Ravi MansukhaniEven in the three metros of Delhi, Mumbai and Kolkata, there is a lot of unfinished work to handle. MSOs have to sell packages to the consumers and collect actual subscription revenues from their local cable operators (LCOs).

“Though consumers are getting digital service, they are not yet in a position to exercise absolute choice. This facility is only now being offered in Delhi by the MSOs, where various packages and a la carte channels are available to the cable subscriber. Mumbai should follow in October and Kolkata in November,” says Mansukhani.

The top four MSOs have spent north of Rs 30 billion in digitisation.

“MSOs have invested huge monies in digital set-top boxes (STBs) and digital infrastructure. Their content cost has jumped, interest on borrowings are high (no infrastructure status as yet) and their carriage revenues have dropped. They will continue to be in pain till they start collecting their dues from the ground,” Mansukhani tells

What MSOs have done so far is encrypt the channels, install STBs in consumer homes and collect CAFs (Customer Application Forms). “We still have to get packaging and retail billing in place in all the cities. The ground collections will come in due course but our payouts are immediate,” says Mansukhani.

Mansukhani expects a foolproof digital system to be in place in the next few months. “Once Mumbai and Delhi have the processes and systems streamlined, then it is only a question of scaling up. Phase II should be less painful. After that, it is back to business , with digital cable giving DTH a run for their money,” says Manshukhani.

IMCL, which operates the cable TV business under the InCable (analogue) and InDigital (digital) brands, has invested Rs 6 billion in DAS (Digital Addressable System). The MSO has deployed 2.6 million STBs, out of which the metros account for nearly 1.3 million.

IMCL’s carriage revenue, which stood at Rs 2.63 billion in FY13, is expected to fall by 30 per cent.

In FY13, IMCL’s consolidated EBITDA was Rs 1.41 billion compared to Rs 1.45 billion. Total income grew 26.8 per cent to Rs 6.11 billion.

Read full interview on Monday.