Set-top shortage could dampen digitization drive

30 Jan,2012

By Nandini Raghavendra & Meenakshi Verma


Five months before time runs out for homes across India’s top four metros to switch to digital transmission to continue watching cable television, operators are battling short supply of set-top boxes as well as ignorance among consumers.


More than 60,000 set-top boxes need to be installed every day to enable an estimated 10 million homes across Delhi, Mumbai, Chennai and Kolkata to meet the deadline mandated by the government.


But with India going digital at the same time as Brazil, Russia, China and South Korea, among other countries, set-top box makers are finding it difficult to meet delivery deadlines. This is the case even as most leading manufacturers, based in China, have ramped up production manifold.


“Most consumers don’t even know that they won’t be able to watch TV with the same cable after the June 30 deadline and that a digital set-top box is a must,” says Mr Anthony Brian D’Souza, a Mumbai-based cable operator.


Direct-to-home or DTH operators, who use satellite and dish antennae, are therefore well placed to grab the business from cable operators. Nearly 80% of the 70,000 odd cable operators are believed to be independent players, who are also finding it difficult to absorb the rise in the cost of imported set-top boxes due to rupee depreciation.


“This is a great opportunity and we are well poised to make the most of cable digitalisation,” says Dish TV’s managing director Mr Jawahar Goel, “The DTH industry will be able to grab 30%-70% of the analog cable homes across various phases depending on the locations.”


Tata Sky has also geared up to cash in on the opportunity. “Our billing and CRM systems handle millions of customers. These have been further scaled up to ensure error free service to many more millions of new subscribers who will join us in next few months,” says chief executive officer and managing director Mr Harit Nagpal. The company can install fresh connections within a day of receiving the order, he says.


Big multi-system operators like Den Networks and Hathaway Cable & Datacom, which have too much on their plate upgrading their subscribers, might find it difficult to add too many new subscribers.


Den Networks has hired Ernst & Young to conduct seminars and train its partners and affiliate local cable operators. “Local cable operators will help us upgrade our existing consumer base on the ground and will play an important part in the process,” says Mr Sameer Manchanda, CMD of Den Networks. He says the company will focus on upgrading its current subscribers in the four metros.


While the industry expects a majority of independent operators to align with the bigger players, many of them may find the switch hard to survive. “The large investments expected from cable operators for setting up the infrastructure in such a short span of time and competition from DTH players could create unemployment among smaller cable operators,” says Ms Roop Sharma, president Cable Operators Federation of India, the largest association of independent cable operators in the country.


Sharma, however, says even the bigger players might find it hard to prove equal to the challenge. “Digitalisation is a mammoth task and there are concerns whether the deadline for the four metros will be achieved,” she says.


An independent cable operator says many affiliate partners of the bigger players are showing a huge resistance to digitisation at the moment. “If someone in the cable fraternity keeps holding out till the last moment in the hope that digitalisation will not happen, he will only be making it easier for DTH players to garner incremental market share at the cost of the cable industry,” says Mr K Jayaraman, chief executive officer of Hathway Cable & Datacom.


Source:The Economic Times

Copyright © 2012, Bennett, Coleman & Co. Ltd. All Rights Reserved


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One response to “Set-top shortage could dampen digitization drive”

  1. A K sekhar says:

    Govt should give NIL duty for the boxes and clear the 49% FDI in cable quickly

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