Ready, Steady, Go? Or Delay?

07 Jun,2012

 

By Shruti Pushkarna

 

With less than a month to go for the sunset date of June 30 for Phase I of digitization of cable television in India, MxM India gets you a status report from the ground in all the four metros, Delhi, Mumbai, Kolkata and Chennai.

 

As per the directive issued by the government of India and the Telecom Regulatory Authority of India (TRAI), Delhi, Mumbai, Kolkata and Chennai are to be completely digitized by June 30. Starting July 1, all analogue signals will be switched off. But is the industry geared up to meet this deadline? And moreover, are the consumers aware of this change that will bring about a significant change in their television viewing. While all industry stakeholders seem to be in favour of digitization, they all have their share of concerns. Some believe that an extension of the deadline will be a welcome gesture by the government while some feel that any extension at this point will only slow down the process further. The industry, some believe, is lacking a sense of urgency to embrace this change and roll out the new technology.

 

MxMIndia learns that I&B Minister Ambika Soni has called for a meeting of all stakeholders tomorrow, Friday, June 8 at 3 pm at the Vigyan Bhavan. A final decision will be taken post this meeting. An earlier meeting with I&B ministry officials held on June 1 generated mixed take-outs. While one participant at the meeting told this writer that there was no indicator that there will be a postponement of the Sunset Date, another industry captain told MxMIndia that there were fair signs that the D-Day will be pushed by at least two months, if not six.

 

Meanwhile, MxMIndia gets you varied views from stakeholders as well as media experts on the status of digitization for Phase I.

 

Cable operators unprepared to meet the deadline, blame lack of set top boxes and consumer awareness

Mumbai: Arvind Prabhoo, Owner, Orbit Television Network: The deadline cannot be met because most of the MSOs have run out of boxes. The LCO has to place an order after which it takes about a week or so for the MSOs to bring in the boxes. The other problem is, since it was May, approximately 30 percent of the people were on vacation, so they have not really spoken to a LCO on the requirement of STBs. Also, despite all the ads running on digitization, people are still quite wary of STBs and the technology, especially the older generation. Explaining it to the elderly is becoming a major problem for installation of the set top box because at such a place one has to spend almost one hour explaining the need and benefits of this technology. So in a day if you get five homes like these, your day is gone. Thirdly, at this time in Mumbai, most cable operators are busy taking care of the monsoon issues and this exercise goes on for about a month or so. Moreover, the task has not been tackled with any kind of seriousness so far. Then there have been ads by DTH players saying that cable will cease to exist post July 1 which has become a deterrent. It takes some time for the LCO to convince the consumer that cable will not switch off, it’s only the analog transmission that will be blacked out. There is no clarity if digitization is going to increase the cost of channel viewing or it’s going to decrease it or if it’s going to have any effect at all. In Mumbai, I don’t think more than 35 percent of the required STBs have been seeded. If the extension comes, again there will be complacency amongst the operators but at the same time, if it starts raining tomorrow in Mumbai, the efficiency to work, transportation etc, will all go haywire. Only 5 percent installations took place in the entire month of May as people were travelling and before that there were exams, so not many installations happened. If the government decides to postpone the date, it will be a welcome gesture but if on June 30 the analogue signals black out, there will be total chaos.

 

New Delhi: Nagraj, Cable Operator, Old Seemapuri: Only 10 percent boxes have been seeded as of now.  Customers are not ready to take the set top boxes, they are not ready to pay. On the other hand, distributors are putting so much pressure to purchase boxes from them saying that if we don’t purchase the boxes now, they will increase the prices later. Government hasn’t issued a single declaration notifying the exact price of the box. And then there’s the issue of Rs. 45 share, how can we survive in that? I don’t know what has prompted the government to lower the rates of cable to this level. Videocon d2h came out with an ad recently saying that cable will cease to exist after June 30, so switch to d2h. Why isn’t the government reacting against such advertisements, this just means that they are teaming up with Dish players. Misleading ads are adding to the confusion and the customers have not been made aware of the issue well enough, they think that if they have to switch to digital they can just buy Dish. I fear that we will have to surrender and leave this profession after July 1. We have been trying to approach the Minister of I&B but she is avoiding us and not giving us a time to meet.

 

Chennai: M R Srinivasan, General Secretary, Chennai Metro Cable TV Operators Association: It’s not possible to meet the notified deadline of June 30. As far as Chennai is concerned, we have a 3 million subscriber base for digitization and of the 3 million so far only 2 lakh boxes have been seeded and the rest of 2.8 million is left. There are two MSOs available in Chennai and none of them have ordered for the new boxes till date. As far as I know, both MSOs have only 15000 boxes and the requirement is for 2.8 million. Moreover, the Tamil Nadu government has written a letter to the I&B ministry for an extension of the sunset date. We require an extension of at least six months.

 

Kolkata: Swapan Chowdhury, General Secretary, Cable & Broadband Operators’ Welfare Association: Nobody is going to meet the mandated date. If it still happens on the set date then the channel/platform will be different, it will be the DTH players who will be given a chance to do business.   As far as seeking an extension goes, it’s not the cable operators but the MSOs who should seek for an extension because they are not able to supply the set top boxes. There is no physical stock of STBs. There are about 40 lakh STBs required in the Kolkata Municipal area and the existing MSOs have supplied only 4.5 to 5 lakh boxes. At the maximum they would have 50,000 to 1 lakh more boxes, which means with less than one month left, the remaining number will face a black out if digitization is implemented by July 1. The government was supposed to conduct four open house discussions for each metro but Kolkata has not been taken into account. Only recently, last week I&B Secretary Mr Uday Varma visited Kolkata and conducted a meeting in the Writers’ Building. After the meeting we have come to know from the daily news that he has agreed to talk to the MSOs and the LCOs for implementation of DAS. Right now only 15 to 20 percent boxes have been seeded and if digitization is implemented on July 1, then a minimum of 50 to 60 percent of the market will black out.

 

Mixed response from the Multi System Operators (MSOs), admit to shortage of boxes

Jagjit Singh Kohli, CEO, Digicable: No we are not ready, we are expecting an extension of the date. The main issue is that there are not enough set top boxes available to meet the demand. We are asking for an extension and most likely it will happen.

 

M G Azhar, COO, DEN Networks: We are ready to roll, we already have the boxes in. If you talk of the larger MSOs, they have got all the boxes ready and the DTH players also have the boxes ready. So in terms of preparedness, we are ready. Only if the government steps in and changes the dates, otherwise I see nothing holding it back. Resistance is coming in because LCO thinks that once these boxes are put, he will lose control but that’s not the case. We look at them as partners and we want to take them along. We are ready to meet the deadline.

 

Ravi Gupta, Independent MSO, Delhi (Delhi Distribution Company): No, we are not ready to meet the deadline of June 30. It is almost impossible to install digital cable system in such short time as given by the government. Even if we manage to collect funds and purchase the material, it is not possible to install it in the given period of time. Secondly, no company in the world can provide you with set top boxes in less than six months’ time. Thirdly, government announced the terms and conditions of licensing on May 28 and we submitted our license applications by June 1 and till date nobody has been issued a DAS license. How can we operate without a licence? The government has taken no expert view on this matter before formulating the policy. After July 1, the people will sit without television.

 

Dish TV ready for digitization, no shortage of STBs

Salil Kapoor, COO, Dish TV: The entertainment arena of television viewing will witness a paradigm shift after digitization is implemented in four metros. As we are Asia’s largest DTH players we have around 12.5 million subscribers in India. We welcome the noble move of digitization by the government. This is a humongous task in terms of implementation and we are ready to take first move of Phase-I in four metros. Though DTH industry is already burdened by multiple taxation but for us we are not short of STBs and we are ready to roll on. There is a buzz that the Sunset Date will be extended but till the government is not issuing or confirming we cannot comment on this.

 

Broadcasters prepared to meet the deadline but not sure if the rest of the industry is ready

Rahul Sood, Head- Network Distribution & Affiliate Sales, NDTV: From a broadcaster’s perspective we are definitely ready but the question is while we are ready, is the cable fraternity, especially the LCOs and distributors, ready to go out and make that extra effort to install boxes? The DTH companies are ready, the broadcasters are ready, it is just the local cable operators and the distributors who might not be ready. While the MSOs are also ready, the resistance is coming in from LCOs and distributors. So those are the two key people who’ve got to make sure that this happens. We are not expecting any magic in 30 days to happen, that all analogue will convert to digital. But the process will start from July 1 and I think once the analogue signals are off then the process will gather a lot more momentum. So there has to be that impetus which will come from the ground. Consumers will start asking for the box and the cable operator or the DTH provider will not have a choice but to give it because if he doesn’t give it, somebody else will. But let’s be clear that it will not be a switch over from 0 to 100 in one day, it will happen over a period of time and the process will gather momentum starting July 1.

 

In India, till the time you don’t switch off someone’s water or electricity meter nobody goes and pays the bill. So that’s the reality of the Indian psyche that we only wait for everything to explode and then we wake up.  So everything in India is last-minute! I can assure you that if government delays this and gives an extension of deadline, we will be having the same discussion six months later as well. If the cable guys don’t do it then the DTH guys will take over, not that the consumer will be blacked out.

 

Media planners based in the the four metros feel the industry is not prepared to meet the deadline

Nandini Dias, COO, Lodestar UM, Mumbai: Moving to 100% digital is a significant change. If July 1 is the deadline by now at least 90% digitization should have been in place across the four metros. My understanding is that it is far from it. In addition the industry bodies of the affected industries have not put out any guideline on the next steps. By now ISA, AAAI, IBF all should have put out some guidelines, implications etc. for clients and agencies to follow. For example, viewership and ratings maybe significantly affected. So as per the usual behaviour pattern the deadline is likely to just get shifted.

 

Mohit Joshi, MD, MPG, Delhi: We are not ready to meet the deadline for the digitalization. I read somewhere that over 19 million set-top boxes are to be shipped to India during 2012 in order to fulfill the ambitious programme to digitize the country’s cable network according to ABI Research predictions. I’m not sure whether we have the infrastructure / back-end for the same. Moreover, there is not much of general information among the viewers and finally there seems to be no urgency in the system. Even the media is downplaying this whole issue.

 

Raj Datta, Senior General Manager, TME, Kolkata: I don’t know about other metros but keeping Kolkata in mind, I don’t think we are ready to meet the deadline. The main reason behind it is the fact that a lot of low-income households have cable connections and it would be a tedious task to replace that with setup boxes. The main problematic area is the Sec D and E unlike Sec A and B where it won’t be difficult to replace setup boxes with analog system. The demand is much higher than the supply and manufacturers are running against time to fill that gap.

 

Sriram Sharma, Vice President, SMG India- Southern Operations, Chennai: See it’s a directive saying they will have to complete it before June 30 in Chennai, so I guess it will be done. Most of them have already geared up for it, there are two networks in Tamil Nadu, Arasu Cable and SCV. About 80 to 85 percent of the total TV homes are cable and satellite homes and they are handled by them. If these two are taken care of then 85 percent of it will almost be completed. So I am sure they are geared up for doing it and I have also seen these two networks distributing set top boxes free of cost to begin with and then amortising the cost over the next four or five months. So they give you an STB and instead of charging Rs 120 or 150 a month, they’ll charge you Rs. 180. So that Rs. 50 a month will be amortised over 6 to 8 months. So it should happen as it will benefit the industry as a whole.

 

An independent commentator on how the deadline is quite a challenge given the state of preparedness

Dinyar Contractor, Editor and Executive Publisher, Satellite and Cable TV Magazine: Nearly 67 percent of the homes in Mumbai still don’t have digital boxes, so it’s pretty much an impossible task that this 67 percent will go digital in the remaining days. In Chennai, Arasu Cable has confirmed that they don’t have set-top boxes. Incidentally, there is a lead time just for a component of a set-top box in the world market today of four months. That means if you order your box today and the manufacturer orders the component, it will be four months before the manufacturer gets the component. What that means is that the box will not be manufactured and it will definitely not reach you before five months. TRAI has declared that every digital headend must deliver 500 channels but a major portion of the boxes already deployed are incapable of doing 500 channels.

 

With inputs from Meghna Sharma

 

Imaging: Rafiq

 

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