Digitization’s sunset date may be delayed

12 Sep,2011

By Akash Raha

 

The process of digitization is unlikely to be over by December 31, 2011, according to key stakeholders among broadcasters and cable organizations. The sunset date for digitization is therefore expected to be extended further, as it seems to be going nowhere at the current pace. The stakeholders say this is because of lack of clarity on the part of the Government, which needs to enable the industry to change over smoothly from analog to digital.

 

The issue of digitization was discussed at length at Focus 2011, a seminar organised by The Associated Chambers of Commerce and Industry of India (ASSOCHAM). The theme of the event, From Analog to Digitization, was held on September 9, 2011 at New Delhi.

 

Earlier in the day, Mr Choudhury Mohan Jatua, Honourable Minister of State, Ministry of Information and Broadcasting said that he was hopeful that the process of digitisation will happen in the stipulated time. He said that his government was doing everything to make it possible, but that to make it possible, the industry itself needs a lot of self-discipline. He said that the changeover from analog to digital is desirable and also compulsory.

 

The romance with digital is on and the era of digital is here, said Mr A Mohan, VP, Zee Networks, kicking off a discussion session moderated by Gunjan Gupta of Deloitte. However, he said, there are several problems on the route to digitisation. The three-fold challenges that he pointed out were investment issues, finding a viable economic model in the digital era, and inter-connection issues. Subject as it is to a variety of taxes such as entertainment tax, service tax, VAT, entry tax and so on, he said, it is very difficult to make any profit. He appealed to the government to rationalize the taxes on the industry. Talking about investment, he said that the Government of India must change its FDI policies, which would help with more funding for digitisation.

 

Ms Roop Sharma, President, Cable Operators Federation of India (COFI), said, Digitization cannot happen by the sunset date unless the government faces its problems and challenges. Moreover, the government has to come up with a phase-wise plan for digitization, as we cannot expect it to happen overnight. Awareness has to be spread, and consumers need subsidies to accept digitization. Ms Sharma, a member of the task force for digitization, and she rues that even after several meetings there is no clarity as to how the government plans to go about digitisation.

 

Mr Sugato Banerji, CMO  DTH, Bharti Airtel, cited several advantages of digitization, beginning from safeguarding national security to more subscription-based revenue for broadcasters. He went on to say that the age of digital will benefit the whole ecosystem  consumer, broadcasters, government and cable operators. Mr Pulak Bagchi, Vice President, Star India too spoke about the advantages of digitization and said, If we intend to digitize in right earnest, the government has a huge role to play.The industry is set to provide 4 percent of the country’s GDP (excluding agriculture). Yet, the investment required for digitization of the whole country is set to be 15 billion USD. He also said that digitization would eliminate cable wars and prevent tax leakages for the government.

 

With 35 million digital households, India is going to be the largest digital market said Mr Siddharth Jain, General Manager, Network and Content Distribution, South Asia, Turner International India. He went on to say that the success of any venture depends most on the consumer experience, which the industry has to keep in mind. Content is king, and yet content has a cost.

 

Mr Raman Kalra, Director and Partner, IBM said that while in future content is going to be the key and content is poke about the future of the medium and said that eventually, content is going to be the key and that is exactly what the customer wants. At the same time, you can’t just thrust technology on him; the convenience of consuming content is also very important.

 

Mr Rohit Bansal, CEO and Co-Founder, Hammurabi & Solomon Consulting, voiced his concern over government’s method of setting deadlines, and he fears that such deadlines won’t get translated.

 

He said, Digitisation has its own advantages, and even though some incumbents are trying to resist it, everyone has to come together and volley for it. The I&B ministry, TRAI and all other stakeholders have to rise to the occasion and do their bit.

 

The recently accepted TRAI recommendations for the implementation of digitisation of broadcast systems in India is expected to open up new opportunities for a broader ecosystem (content providers, broadcasters, equipment providers etc). Yet, there are several challenges en route to migration from analog to digital. The revenue opportunities are substantial, and all that is needed, it seems, is synergy between the government and the stakeholders to make the sunset date possible and viable.

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