The Anchor: Dinyar Contractor on 10 reasons why the digitization deadline is a mighty challenge

01 Jun,2012

By Dinyar Contractor


1. At the FICCI- I&B ministry meet that was held a week ago in Mumbai, barely 40 days before the analogue sunset date, the I&B officials said that they had reviewed digitization in Mumbai the previous day so their report was immediate and current and they confirmed that 33 per cent of the homes in Mumbai already have set-top boxes. I would like to turn that around factually and say that 67 per cent of the homes did not have digital boxes even 40 days before the sunset. So it is pretty much an impossible task that 67 per cent will get it within 40 days.


2. Let’s look at Chennai. Arasu Cable has confirmed that they don’t have set-top boxes. In fact, a day after the FICCI meet, Arasu had asked its cable operators to log in to the Arasu site and send in their estimates of how many boxes will be required. Arasu will then put together these estimates and float a tender which means they would then start asking for people to give prices for boxes. So for the boxes coming in is way over the horizon for Chennai.


3. 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. Therefore, if at all there is a postponement, it doesn’t make sense to have any postponement which is earlier than Jan 1, even six months is really cutting it fine.


4. There is a major national level MSO who candidly admitted to me that their HD boxes have landed but they don’t have the funds to clear them. The government had promised 74 per cent FDI as part of the digitization effort but the government has not implemented this and therefore, MSOs have not been able to tap foreign investors. So without enabling funds, the government has put this clause out which does not make any sense.


5. We are talking of a sunset date 30 days from now. So for instance, I as a cable operator go to somebody’s home and I say please take the set-top box. And they say, sure I’ll take it but what is it going to cost me? And I say I don’t know what it is going to cost you because the government hasn’t declared the rate. Now as a customer I would not accept the box.


6. On May 28, the TRAI put up all the analog pay channel tariffs. There is a Supreme Court judgment which says that broadcasters cannot charge more than 42 per cent of the analog pay channel rates for digital. So 42 per cent is the ceiling, however that 42 per cent is completely irrelevant since broadcasters are providing pay channels to DTH platforms at something between 10 to 15 per cent. So from May 28, the ball has started rolling where negotiations have been opened between broadcasters and MSOs to work out some figure for their pay channels that will be somewhere between 10 and 42 per cent. So there is a huge spread in the rates between 10 and 42 per cent, these negotiations are obviously not going to quick and easy. I don’t see these negotiations culminating in three weeks or a month.


7. There was a Parliamentary Committee report which was released and tabled in the Lok Sabha a few days ago where the Committee says that this entire thing should be delayed by at least six months. I see this as the first stone thrown by the government to ripple the waters and start talking of a delay.


8. The TRAI suddenly declared that every digital headend must deliver 500 channels. Incidentally, a major portion of the set-top boxes already deployed are incapable of doing 500 channels. This is again a fact that is not adequately ventilated. They can typically do 350 channels, less than 400 channels. It means that they have to take out may be 2 million of the boxes that have already been seeded and throw them away. Where is the money going to come from? We are not even realistic about what is going on.


9. In Kolkata, don’t forget there is Mamata Banerjee who might rake up the issue against digitization depending on the political capital it might have.


10. Here you have a sunset clause where the government has not enabled anything, they have only been talking of a sunset but they have not done anything to facilitate and to enable the sunset. The delay has nothing to do with the MSOs or the cable industry, it is simply completely chaotic unplanned deputation of the law or total lack of enabling a systematic process in which digitization could have been introduced.


Dinyar Contractor is Editor and Executive Publisher, Satellite and Cable TV Magazine (


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