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Atul Saraf’s ABS partners Videocon to enter STB manufacturing

MUMBAI: Atul Saraf-promoted ABS Group has teamed up with Videocon Group to manufacture set-top boxes (STB) for multi-system operators (MSO), a market currently dominated by multinational companies like Cisco and Chinese vendors like Coship. The STB manufacturing business will function under a subsidiary company ABS Production.

The company will manufacture both standard-definition (SD) and high-definition (HD) STBs using M-Star and Broadcom chipsets respectively. The chipsets will come integrated with the conditional access systems (CAS) of all major vendors like NDS, Conax, Irdeto, Nagravision, and Sumavision.

According to Saraf, the time is ripe for indigenous STB manufacturers to make the most of the opportunity from digital addressable system (DAS). The STBs were on display during the recent Convergence India.

Atul Saraf

Atul Saraf

As many as 110 million STBs will be required for Phases III and IV of DAS. The deadline for Phases III and IV is December 2015 and 2016.

“We got a very good response from national and independent MSOs during Convergence India. We will start taking orders from next month to manufacture STBs. The chipsets are already integrated with CAS,” ABS Group CMD Atul Saraf told TelevisionPost.com.

Saraf said that ABS has worked out an arrangement with Videocon Group to utilise Videocon’s Aurangabad facility to manufacture STBs. Videocon Group, which owns direct-to-home (DTH) brand Videocon d2h, manufactures its own STBs.

The Videocon factory in Aurangabad has a capacity of generating 1 million STBs a month in one shift and in multiple shifts that number will go up significantly.

“Videocon will be like an original equipment manufacturer [OEM] for ABS. The cost of STBs will differ from MSO to MSO. We have the capacity to produce a million STBs a month,” Saraf added.

He also said that the company has been testing the STBs on its network for the last one year. “We have already deployed both SD and HD STBs on our network to test them,” revealed Saraf.

The biggest advantage of local manufacturing of STBs is the availability of after-sales service. ABS will utilise Videocon’s service centres to provide after-sales service.

“The biggest problem with foreign vendors is that there is a language barrier particularly with Chinese vendors. The other is that they don’t have service centres in India. The operators can also save on 10 per cent import duty. We will be able to prevent foreign exchange from going out of the country,” he affirmed.

Another advantage of sourcing STBs locally is the tax benefit that will accrue to the MSOs. “The MSOs will not just save on STB cost, but also on taxes. The overall savings for MSOs will work out to 10–15 per cent,” Saraf revealed.

The Ministry of Information & Broadcasting (MIB) has been harping on indigenous STBs as part of Prime Minister Narendra Modi’s ‘Make in India’ scheme.

The indigenous STB manufacturing industry is expected to provide employment to about 50,000 people and would attract an investment of about Rs 500 crore. It would generate local support facility for repair of STBs and would also help in smooth implementation of the digitisation initiative in the country.

The Ministry of Finance had last year extended the facility of Form ‘C’ under section 8(3) (b) of Central Sales Tax Act 1956 to STBs, thus fulfilling the major demand of the domestic STB manufacturers. Domestic STB manufacturers would charge CST @ 2 per cent against VAT of 12–14 per cent being paid earlier.