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Set-top box supply shortage as DAS Phase III nears finishing line

MUMBAI: Just a couple of days before sunset falls on analogue cable TV in the Phase III towns of India, most multi-system operators (MSOs) are complaining of shortage of supply of digital set-top boxes (STBs).

Supply could fall short by several million boxes, the head of a mid-sized MSO said on condition of anonymity. Though frantic efforts are being made to procure the STBs, their availability in appropriate numbers is suspect.

Production of STBs has taken a hit. MSOs are mainly dependent on Chinese manufacturers for the STBs to make the digital switch. But the problem seems to be with the chipsets and the tuners, which are globally in short supply at the moment.

Bala Malladi01“There is a supply constraint of tuners and chipsets at a global level. Though we had placed orders four months back, we are still waiting for the boxes to land. We are even airlifting the STBs. We have deployed about 400,000 STBs and would require a similar number to digitise our cable networks in Phase III towns,” said Atria Convergence Technologies chief executive officer Bala Malladi.

Atria runs its cable TV operations through downstream subsidiaries. In Bengaluru, the cable TV operations are run through Kable First India while ABS Broadband operates in Karnataka and ACT Digital in Andhra Pradesh. The company is awaiting approval from the Foreign Investment Promotion Board (FIPB) to up its stake in GTPL-COO-Shaji-Mathews01ACN Cable, a subsidiary company with a permanent MSO licence for the Nellore region, from 49 per cent to 74 per cent.

“There is a shortage of components for the manufacturing of STBs in China and among European suppliers. Tuners are in short supply,” said GTPL Hathway chief operating officer Shaji Matthews.

Agrees UCN Cable Network director Ajay Khamankar, ” Production in China has taken a hit due to which there is a dearth of STBs. Even after the STBs have come from China, the custom clearance and bank holidays had resulted in delays. There was a huge increase in STB orders as cable operators were under the impression that the deadline for DAS (digital addressable system) Phase III would get extended. We have almost digitised 60 per cent of our TV universe in Vidarbha and Madhya Pradesh. The demand for STBs will increase once the analogue signals are switched off,” he said.

Bibhu Prasad RathWith demand so huge, manufacturers of STBs are finding it difficult to meet delivery deadlines. Ortel Communications president and CEO Bibhu Prasad Rath admits that there is an acute shortage of STBs required for implementation of DAS in Phase III towns. “We have placed orders and made necessary advance payments for all our requirements, but are facing supply constraint. We are on the job and trying our best to expedite the process as much as possible,” he said.

According to market estimates, the shortfall for some of the bigger MSOs could be around 15–20 per cent. In case of smaller MSOs, this could go up to even 50 per cent.

Jagdish-Kumar-insideHowever, Hathway Cable & Datacom MD and CEO Jagdish Kumar says that his company is not facing any STB shortage. “We are comfortable with our inventory and are going to receive more STBs very soon to meet our requirement.” Hathway had earlier indicated that it had contracted for three million STBs.

Some states like Kerala are more prepared to implement DAS in Phase III. With the coverage area for Phase III being revised and cut down sharply, Kerala is indeed ready to meet the DAS deadline. In the first list, 520 urban areas were identified for Phase III touching an estimated 29,77,827 cable TV homes. In the new list, this has been reduced to 64 urban areas covering an estimated 11,58,776 cable homes.

G-Shankaranarayana“Kerala is comfortably placed so far as Phase III of DAS goes. We have been digitising from 2006 onwards. Besides, the territory for Phase III of DAS in Kerala has been reduced significantly in the new list,” said Asianet Satellite Communications president and COO G Sankaranarayana.

The government has been firm on not stretching the deadline for DAS in Phase III areas. The Ministry of Information & Broadcasting (MIB) has issued letters to broadcasters directing them not to supply signals to all those MSOs who do not have registrations and are not transmitting digitally encrypted signals in DAS Phase III areas after the 31 December 2015 deadline.

As per data provided by the MIB in the first list, DAS Phase III will cover 38.79 million television households across 630 districts and 7,709 urban areas. The list has been updated and many areas have been reduced.

Direct-to-home (DTH) operators and MSOs have been mopping up digital subscribers for some time now. An exact estimate of the STB requirement for Phase III is difficult to gauge at this junction, but everybody agrees that it will be a mammoth exercise.