MxMIndia

Category: DIGITIZATION

  • Out of total requirement of about 35 lakhs STBs, over 5 lakhs STBs have already been installed, about 4 lakhs STBs are available in the stock which are being installed and the orders have already been issued for the balance requirements of STBs

    Nearly 10 lakh STBs ready for Kolkata

    By A Correspondent

     

    The Cable Television Networks (Regulation) Amendment Act, 2011 has made it mandatory for switch-over of the existing analogue Cable TV networks to Digital Addressable System (DAS) by December 2014, in a phased manner. In respect of four metros of Delhi, Mumbai, Kolkata and Chennai, the digital switch-over is to be completed by June 30.

     

    The ministry is very closely monitoring all the activities for the timely implementation and the quality of the Digital Cable TV service. During the high level review meetings by the Ministry, it was revealed that in the case of Kolkata, out of total requirement of about 35 lakhs STBs, over 5 lakhs STBs have already been installed, about 4 lakhs STBs are available in the stock which are being installed and the orders have already been issued for the balance requirements of STBs.

     

    Further it came to the notice that all the MSOs already have digital head ends and the existing channel capacity in each of the case is over 200, which is the mandatory requirement as per the Telecommunication (Broadcasting and Cable Services) Interconnection Regulation, 2012. The channel capacity is being augmented by the MSOs.

     

  • Large cable distributors have said that one factor alone – a huge six-eight times hike in subscription revenues alone- would buttress their already profitable balance sheets

    Cable cos expect major hike in subscriber revs

    By A Correspondent

     

    TRAI’s argument that carriage fees paid by TV channels to cable MSOs are necessary to fund their digitisation appears to be falling apart scarcely a week after it was made. Instead, large cable distributors have themselves said that one factor alone – a huge six-eight times hike in subscription revenues alone as declarations spiral with addressability – would significantly buttress their already profitable balance sheets.

     

    With additional revenues from broadband and VAS, industry estimates also say that a bundled digital and broadband + VAS business model will result in the payback period being reduced by a year to 24 months, as opposed to 36 months under a standalone digital cable TV proposition. This comes even as industry reports –including one released five months ago– have been pointing out that all major national MSOs are already adequately funded for Phase I digital deployment (mandatory only in the four metros from July 1).

     

    Given that the government is also shortly planning to hike FDI for MSOs from 49 per cent to 74 per cent, industry analysts have questioned why TRAI assumed MSOs and cable distributors needed money in the form of mandatory carriage fees by TV channels – an annual recurrence – to fund their upgradation, which is only a one-time investment. This is especially inexplicable, as TRAI’s own April 30 Explanatory Memorandum to the DAS Regulations states: “In the addressable systems, due to transparency in ascertaining the number of subscribers, the subscription revenue is expected to go up. Therefore, the dependence of MSOs on the carriage fee, as a source of revenue, is likely to be reduced.”

     

    It has been well known that the cable distributors are the profitable, cash rich last mile, with even many smaller operators who under-declare subscribers/taxes, expanding into other activities like real estate, auto agencies, ancillary services, and so on — while most broadcasters have turned sick due to a killer combo of low ad rates, gross subscriber under-declaration and huge carriage/placement fees.

     

    The national MSOs, are, in fact, almost all profitable, with even newer ones like Den Networks having posted a 20.7 per cent yoy revenue growth in Q3 of the fiscal just ended, including a 6.6 per cent rise in its net profit. That is why the added bonanza of TV channels having to now mandatorily pay MSOs carriage fees caused MSO share prices to jump after the TRAI tariff order was announced– even as listed broadcaster scrips sank.

     

    Shares of Hathway Cable and Datacom had closed on May 2 at Rs185.40, 19.23 per cent above its previous BSE close, missing the upper circuit by a small margin, Den Networks also touched an intraday high of Rs116.90, before closing at Rs110.80, 2.12 per cent above its previous close.

     

    Earlier, a Media Partners Asia (MPA) report (Investing in Digital India) of December 2011 had projected a six times increase in subscriber revenues for MSOs, albeit with a 20 per cent subscriber churn to DTH – but MSOs themselves reacted very positively over the TRAI tariff order.

     

    Hathway Cable & Datacom MD & CEO K Jayaraman told a business daily last week, that his company expects revenue to go up by 250 per cent post-digitisation. “We have 9 million homes and, at the least, we expect to double the subscriber base as 80 to 90 per cent of the carriage revenue will go to MSO. Broadly, after taking churn and loss in the carriage fee, we expect revenue to go up by 250 per cent “, he said. The company’s CFO, G Subramaniam, said during the same interview, that while carriage fees would reduce, the subscription revenue would rise from 10-15 per cent of the revenue mix currently. “This increase is likely to be six-eight times, and will make up for the loss of carriage fee”, he added. Both said that digitisation would help them grow their broadband business – already significant, given that as per Mr Jayaraman,

    Hathway already had 4 lakh broadband subscribers and a Rs 150-crore topline, which he expected would double in the next couple of years.

     

    Mr Jayaraman also outlined the many sources for his company’s digitisation upgrade: IPO funds and a mix of internal accruals, debt and vendor finance. He said: “The capex will be Rs1,000 crore. Of this, Rs300 crore will be spent in Phase-I and the rest in Phase-II. Phase-I is to be financed from initial public offer proceeds. A mix of internal accruals, debt and vendor finance will be deployed in Phase-II. The funding plan for the second phase is yet to be finalised,” he added.

     

    The MPA report – which was released five months ago – also states clearly: “According to MPA analysis and interviews, all major national MSOs are adequately funded for Phase I digital deployment. The cost of digital software and hardware has also fallen since 2007, ensuring set top boxes plus the CA card will cost about $30-40 per unit in total including duties, compared with $60 three years ago”, and adds that a number of the MSOs (like Hathway, DEN) are also ordering digital STBs in larger volumes like 1 million per annum, by which costs are lowered to at least $30 per unit.

     

    For instance, this report also gave company-wise details on the impressive progress they had already made on digitisation, and outlined their excellent financial situation to achieve the same. For instance, it said that Hathway had a debt to equity of 0.3x and a high promoter holding (67 per cent), hence “the company has enough head room to raise further capital”. While it said that DEN had a “comfortable debt to equity stand of 0.2x with a net cash of Rs9.5crore”, it also had sanctioned loans of Rs200 crore, which had not been drawn at the time of the report’s release. Even regional MSOs like Ortel, which might have a comparatively higher debt to equity at 1.6x as per the report, appeared comfortable placed to take care of their digitisation upgrade.

     

    Source: The Economic Times
    Copyright © 2012, Bennett, Coleman & Co. Ltd. All Rights Reserved

     

  • The Telecom Regulatory Authority of India has issued regulations of the quality of service and consumer complaint redressal mechanism for digital addressable cable television

    Address consumer complaints within 8 hrs: TRAI

    By A Correspondent

     

    The Telecom Regulatory Authority of India (TRAI) issued the Regulations on the Quality of Service and Consumer Complaint Redressal Mechanism for the Digital Addressable Cable TV Systems (DAS) on May 14.

     

    Under the new order, every multi-system operator (MSO) or his linked local cable operator (LCO) will have to establish a complaint centre in his service area, for redressal of complaints and for addressing service requests of his consumers before providing the digital addressable cable TV services.

     

    Every complaint centre will be accessible to the consumers from 8am in the morning to midnight on all days of the week. The complaint centre will have facilities for the local language of the area in addition to Hindi and English. Every MSO or his linked LCO will deploy sufficient number of employees at his complaint centre to meet the Quality of Service (QoS) parameters, as may be specified by the Authority from time to time.

     

    The MSO or linked LCO will have to ensure that the complaints centre is accessible and has a toll-free number which will be widely publicized. In the new regulations, TRAI has also issued details of how an Interactive Voice Response System (IVRS) should function, and how consumers should be made aware of the existence of the centre.

     

    Every MSO or linked LCO will have to establish a web-based complaint monitoring system to enable the consumers to monitor the status of their complaints. Every MSO or his linked LCO will also have to designate a one or more nodal officers in every state in which it is providing its services. In case the consumer is not satisfied with the redressal of his complaints through Complaints Centre, he can approach the nodal officer of the operator.

     

    MSOs or their linked LCOs have to publish a consumer’s charter for DAS providing all necessary details with respect to the services being provided by them.

     

    Under the Quality of Service (QoS) Regulations, a standard application form will be devised giving all details to be used for providing services such as connection, disconnection, shifting and return of set top box (STB).

     

    The consumer will have to be given a prior notice of a minimum of 15 days for disconnection of services. Similarly, the consumer will have to give a prior notice of minimum 15 days for making a request for disconnection.

     

    No charges other than rentals for STB will be charged in case the connection is suspended on the request of the consumer for a period of minimum one month to maximum three months.

     

    Operators will publish a manual of practice and provide it to the consumer at the time of enrolment. The manual of practice, apart from Hindi and English, should be in the language of the state where the cable services are provided.

     

    Every MSO will offer cable TV services on both pre-paid and post-paid payment options to the subscriber and will be responsible for generation of bills for the subscribers. It will be open to the subscriber to choose either the pre-paid or post-paid option.

     

    Operators will have to offer three schemes for STBs to the consumers, and these are outright purchase, hire purchase and rental. Operators will have to provide a minimum warranty of one year for STBs acquired by the consumer under outright purchase scheme.

     

    The security deposit of the STBs has to be refunded within seven days of surrender of the STB by the consumer.

     

    All MSOs and cable TV operators will conduct public awareness campaign about the salient provisions of these regulations.

     

    Meanwhile, TRAI has issued amendments to the Interconnection Regulations issued on April 30 under which the MSOs have been barred from charging any placement fee from broadcasters.

     

    Giving in to a collective demand of broadcasters, the Telecom Regulatory Authority of India (TRAI) has barred Multi System Operators from charging a placement fee from channels in lieu of placing them in select slots.

     

    TRAI has issued amendments to the Interconnection Regulations which were earlier issued on April 30. The interconnection regulations are applicable to all digital addressable cable TV systems (DAS).

     

    As per the amendments, TRAI states, “Multi System Operators are not to demand any placement fee from broadcaster.” In a move to make the system more transparent, TRAI has specified, “Tthe Reference Interconnect Offer of a multi-system operator submitted to the Authority to contain the basis on which the carriage fee payable by the broadcaster has been determined.”

     

    TRAI also mandates every MSO to display in his Electronic Programme Guide, all the channels offered by him, in the same genre in which a particular channel has been indicated by the broadcaster and one channel shall appear in only one genre.

     

    Under the new regulations, broadcasters will also have to declare the genre of their channels which may be either News and Current Affairs or Infotainment or Sports or Kids or Music or Lifestyle or Movies or religious/Devotional pr General Entertainment (Hindi) or General Entertainment (English) or General Entertainment (regional language).

     

  • The TRAI has issued a regulation that restricts ad duration to 12 minutes per clock hour with no allowance for carry over. Also, ads can henceforth be only full-screen.

    TRAI curtails ads to 12 mins per clock-hour, no part-screen ads allowed

    By A Correspondent

     

    First the good news: the Telecom Regulatory Authority of India (TRAI) is not going ahead with the suggestion of limiting ad duration to just six minutes per clock-hour for pay channels.

     

    And then the bad news (for the industry at least): Despite stiff opposition from broadcasters and industry associations, the TRAI has issued its Standard of Quality of Service (Duration of Advertisements in Television Channels) Regulations 2012.

     

    These are the prominent amongst the directives:

    1. Duration of ads in TV channels to be limited to 12 minutes per clock hour. Any shortfall in ad duration cannot be carried over.

     

    2. Ads during live broadcast of a sporting event to be only during breaks in the sporting action

     

    3. The minimum gap between two consecutive ad breaks to be not less than 15 minutes. In case of movies, this should be a minimum of 30 minutes. However, this doesn’t apply to live sports

     

    4. Ads can be only full-screen. Part-screen and drop-down ads aren’t permitted

     

    5. Audio level of ads cannot be higher than that of the rest of the programmes being broadcast

     

    Note the regulation does not specify special status for pay and free-to-air channels or for news channels.

     

  • A new notification issued by the regulator on Monday limited the amount of advertising on TV channels and disallowed any shortfall in a particular hour to be carried over

    Broadcasters slam TRAI notification to limit ads

    By A Correspondent

     

    Broadcasters and advertisers have slammed Telecom Regulatory Authority of India (Trai) move to limit the duration of television advertisements to 12 minutes in an hour, and accused the regulator of exceeding its brief.

     

    A new notification issued by the regulator on Monday limited the amount of advertising on TV channels and disallowed any shortfall in a particular hour to be carried over. According to industry estimates, this could impact advertising revenues of broadcasters by 15-40 per cent.

     

    “Trai has no jurisdiction in the subject. Advertising is governed by the Cable and Satellite Act and the appropriate authority is the ministry of information and broadcasting,” said Uday Shankar, president of the Indian Broadcasting Foundation, and the chief executive officer of Star India. “The regulator is overstepping its brief,” he added.

     

    According to Mr Shankar, the low revenues from subscriptions give broadcasters no option but to rely on advertising inventory and revenues to survive.

     

    An Indian Broadcasting Foundation official said an earlier government guideline stipulated that Trai could issue an advisory with regard to advertising but not a notification.

     

    Sunil Lulla, managing director and chief executive officer of Times Television Network, which runs Times Now, ET Now and Movies Now channels, too criticised Trai’s decision. “This move is completely ridiculous. Self regulation is the best regulation,” he said.

     

    “This move will have an immediate impact because right now there is no other big source of revenue for broadcasters,” said Rohit Gupta, president of Multi Screen Media, the company which runs Sony Entertainment Television. The IBF will appeal against this new regulation, he added.

     

    Barun Das, chief executive officer of Zee News, questioned the timing of the regulation at a time when the entire broadcasting industry was going digital. “We have a limit mentioned in the Cable Act. If at all there is a need for regulating duration of advertising, it possibly could have waited some more time for the digitisation process to settle down.” he said.

     

    Mr Das said his channel had voluntarily cut its advertising inventory by 30per cent earlier this year. “We realise that too much advertising is a deterrent to viewership. We were not driven by regulations, rather we were driven by market forces,” he said.

     

    Mr Das said the viewers had choices not only of channels but also of media platforms. “I am not sure if advertising volume needs to be regulated. I would tend to believe that too much advertising would anyway drive away viewers,” he added.

     

    Sale of television rights have become an important source of income for sports bodies such as BCCI but the restriction on advertising will adversely impact the ability of broadcasters to recoup their investments, forcing them to scale down their bids.

     

    Source: The Economic Times
    Copyright © 2012, Bennett, Coleman & Co. Ltd. All Rights Reserved

     

  • Pradyuman Maheshwari believes the TRAI shouldn’t be policing broadcasters and says it's time the TV-wallahs get a good, powerful lobbyist

    Mediaah! Broadcasters suffer with ad restrictions while print & web publishers have fun

    By Pradyuman Maheshwari

     

    So the TRAI has finally chosen to subject the television channels to its regulation over ad duration in the guise of quality of service. Assorted politicians and consumer groups who’ve been complaining about the ads on telly should be happy, but I would see the development as unfortunate.

     

    Yes, some of the practices adopted by our broadcasters are reprehensible. They deserve to be damned.  But should the government directly or via a regulator like TRAI be getting into the act? I don’t think it should.

     

    Market forces will force channels to ensure viewer experience isn’t impacted beyond a point. In fact in the chase for ratings, the entertainment-wallahs have already done that.

     

    My heart goes out to the news channels who are going to be impacted the maximum. Ads in the form of tickers etc amount to revenues of around Rs 100 crore across channels, I was told.

     

    The battle is going to move to the Courts/TDSAT, I am told. I hope the learned souls there see reason.

     

    What about other media?

    If broadcasters get carried away with commercials and if the government and/or TRAI sincerely believe that they are taking consumers for a ride, then what about newspapers, radio and the internet?

     

    Full page ads on Page 1, half-jackets, ads flowing through editorial… etc etc etc. All of this in print.  Radio has ads camouflaged as RJ mentions. On the web: innumerable innovations, site captures, interstitials, awful and annoying innovations done by some of the trade sites.  And then innumerable advertising mailers. I must add here MxMIndia too carries site captures and while we don’t send more 5-6 mailers or at most 10 a day, guess we’re getting there.

     

    Now, other than our readers cursing the publications in question, there’s no one stopping the print and web players from carrying intrusive adverising. Also, the ad-edit ratio can well exceed 70-30 on big occasions like Diwali or Akshya Tritiya.

     

    Wanted a top quality lobbyist for TV!

    Perhaps the television industry must hire a top draw bureaucrat to lobby its case to the powers that be. The fact is that the Indian government policies are skewed against the television media. Even on issues like service tax, while advertisers don’t have to pay any levy for an ad in print, they’ve got to cough up the entire 12.36% for TV, the web and I guess radio too.

     

    Even though television has some rather powerful players, it’s evident that the print folks command more respect. Or at least the government tries to not meddle in their affairs.

     

    It’s not that established print players don’t have a broadcast interest… we have BCCL, India Today, ABP, Malayala Manorma, Lokmat, Sakal, Mathrubhoomi and Eenadu amongst others, but it’s just that they are more revered for print than television.

     

    Now that INS president Ashish Bagga also heads up the TV Today Network as CEO of the India Today group and the MCCS channels are better integrated in the ABP group, perhaps the old warhorses must exert pressure.

     

    Buzz me if you have a story to tell. Confidentiality assured. There are various ways you can reach me:

    pradyumanm[at]mxmindia.com, BBM 23050B5D, Gtalk pradyumanm@gmail.com, Twitter @pmahesh and of course the mobile: 98338 76278.

     

    Disclaimer: Although he is CEO and Editor-in-Chief of this site, Pradyuman Maheshwari’s views in Mediaah! are not necessarily those of the rest of the team and MxMIndia.com.

     

  • With just 44 days to go for the Big Switch in 4 metros, Ashish Pherwani & Devendra Parulekar of Ernst & Young address the key business questions

    So will Digitization mean more Revenues?

     

    By Ashish Pherwani & Devendra Parulekar

     

    It is estimated that India has 127 million C&S television homes, out of which around 32 million are DTH, 7 million digital cable and the balance 88 million analogue cable homes.  The first phase of digitization of analog TV broadcast, which covers the four metro cities – Delhi, Mumbai, Kolkata and Chennai – is mandated to be completed by June 2012, while the entire country is to be digitized by December 31, 2014 when analogue signals will be finally switched off completely.

     

    It is expected that the industry will need to invest around Rs75 billion in the process, and Phase I alone will need around Rs11 billion. This is based on the assumption that the cost of digitization per subscriber will be Rs1,500, out of which around Rs600 will be borne by the customer.

     

    The following present some of the key aspects of digitization:

     

    How does digital cable compare with DTH, the current digital distribution leader?

    Digital cable has the capacity to carry 1,000 Standard Definition (SD) channels and surpasses DTH, which can only carry 250-300 SD channels at present due to limited transponder availability. In terms of technology, digital cable is capable of having a “return path”, which is not possible in the case of DTH. This limits the latter’s scope to provide value-added services and dual play. Digital cable is able to provide a larger number of regional channels, and given the growth of the Indian media sector – fueled largely by regional content – this could be a significant advantage for it.

     

    However, in terms of customer connect, management capabilities and readiness, DTH players have a definite advantage, since while they have had B2C from the beginning, most Indian MSOs still have B2B. DTH players already have in place customer-centric systems and processes, including multi-lingual call centres and field engineer forces.  They understand the implications of running a B2C business, having already implemented subscriber management systems, customer relationship management systems, and so on.  Moreover, DTH players have already invested heavily on building their brands, using ambassadors such as Saif Ali Khan, Aamir Khan, Shah Rukh Khan and Abhishek Bacchan, thereby making DTH an aspirationally more desirable product.

     

    Due to the factors mentioned above, it is expected that there will be a churn of subscribers from cable operators to DTH, particularly in Phase I. While certain MSOs peg this churn at 15 per cent in favour of DTH, DTH players are more optimistic and expect to gain up to 40 per cent of MSOs’ customers. This churn will, however, largely depend up the readiness of MSOs to meet digitization deadlines and also take advantage of the marketing and sales efforts of MSO and DTH players.

     

    Another factor that needs to be considered is Headend in the Sky (HITS).  HITS operators may find it advantageous to assimilate smaller LCOs by becoming their technology service providers and providing them with content as well as SMS, CRM and billing services.  However, this could pose issues for MSOs, who are counting on aligning themselves with such LCOs.

     

    Evolution of the distribution system

    The distribution system comprises four key segments:

    • DTH companies
    • Large national multi-service operators (MSOs) – 5-6 players
    • Small MSOs with a regional presence – around 25 players
    • Small LCOs (local cable operators) – around 40,000 players

     

    Currently, national MSOs have interests in several smaller MSOs and LCOs. This is either in the form of investments or JV agreements.

     

    Going forward, the distribution system is expected to evolve, based on the ability of small players to scale up their operations. Today, the main role of an MSO is to buy content from broadcasters, decrypt it and distribute it to LCOs for last-mile distribution to customers. All customer-facing operations are performed by LCOs, which include billing, collection, repairs and maintenance.

     

    Once digital addressable systems are set up, some of the smaller MSOs or more competent LCOs may decide to provide all services to customers themselves. In this event, they may break away from their parent MSOs, and assisted by funding and systems setups, be in a position to manage their customer bases on their own, and thereby gain a large share of the total subscription revenue generated.

     

    Therefore, we expect that broadcasters may not only be dealing with the big 5 MSOs, but the big 50 MSOs as well in a short time, which would be a definite advantage for them.

    The depth of relationships of MSOs with their JV partners and the LCO community will be critical for a successful national roll-out.  It will determine which and how many LCOs team up with each MSO, as well as the share of revenue an MSO can expect to receive from LCOs.

     

    The entry of pure-play global cable operators such as Liberty and Comcast could result in consolidation of the industry.  The proposed change in FDI limits for all cable distribution to 74 per cent, and the sheer size of the Indian TV market, is sure to interest such global players. PE players have shown a significant interest as well, but appear to have taken a watch-and-wait approach to determine how phase I of the digitization process plays out before deciding on whom and how much they will fund.

     

    How will ARPUs move?

    Given the past as a benchmark, one likely scenario is that the base pack of free to air (FTA) channels is priced at around Rs100 plus taxes.  Earlier indications from TRAI indicated a rate of around Rs83 plus taxes, but given that several channels are expected to opt for FTA in the digital arena, this will probably increase.  The cost of this base pack is, therefore, expected to increase at an inflationary rate of around 8per cent every year.

     

    High growth rates of 10-15per cent are likely to be seen in tier 1 and tier 2 packages, which will comprise most of the popular pay channels, e.g., the GEC and sports channels, and be priced between Rs150 and Rs250 plus taxes.  Premium packages, priced at Rs300-500, and including packages that have a large number of niche and HD channels, will probably grow at 15-20per cent per annum.

     

    Compared to the current ARPU of Rs140 per subscriber, we expect that within two years, the average family cost per TV set will increase to Rs250, inclusive of taxes.  The important factor to note is that households with two or more TV sets (according to estimates as high as 20per cent or more in the four metros) are likely to opt for addressable digital systems, and thereby, increase the size of the industry significantly.

     

    Application of a price cap, either at per channel level or a package level, could prove detrimental to the roll-out of digitization.  The equilibrium brought about by market forces would ensure optimal price points from a customer perspective.

     

    The tax impact could be significant as well.  The so far largely untaxed 88 million analog subscribers will now be subject to taxation, and this is likely to result in an increased cost of Rs25-45 per subscriber per month.  In all probability, this cost (around Rs4,000 crore a year) will be transferred to customers by the industry, and therefore, ability to increase ARPUs may be impacted in the short term.  Therefore, the efficiency of the value chain will be critical in determining the actual incidence of taxes levied on LCOs, MSOs and broadcasters.  The cost incurred to digitize networks also needs to be considered in terms of a one-time write-off or by spreading its impact over several years.

     

    How will ARPUs be shared?

    Honestly, we don’t know.  Today, many LCOs retain up to 85per cent of the revenues they collect from their end customers due to under-declarations made by subscribers, and the balance is split between MSOs and broadcasters in a ratio of 1:2.

     

    Different MSOs are proposing different splits.  Some envisage an equal split between the broadcaster, MSO and LCOs.  Some expect LCOs to retain 50 per cent of the collection, even two or three years down the line (given that it would be difficult for them to give up their revenue share).  According to a recent news article, TRAI is considering a regulation whereby LCOs will retain 70 per cent of the collections.  Some sources indicated that MSOs may guarantee revenues for certain LCOs at their current take-home levels for a year or two.

     

    Eventually, once addressability sets in, the share of revenues is expected to be driven by services provided to the customer.  Broadcasters will get a share for the content they provide; MSOs for their buying efficiency and the technology support they provide;  LCOs a share that is proportionate to the last- mile and customer-facing activities they provide.  If we compare this to the telecom sector, 60-70 per cent of the revenues are retained by telcom, as compared to 90 per cent by MSOs and LCOs.  This percentage needs to come down to global levels, where less than 50 per cent is the share of the distributors.  But this will take time.

     

    How carriage fees are likely to move

    Every business has a cost of distribution, and media is no different.  The cost of carriage will remain, one way or the other, whether as a per subscriber technology, a provisioning cost, a fee to place a channel in a package or as one to position a channel within a genre.

     

    There is likely to be some reduction in carriage fees, since digitization will result in eradication of the artificial scarcity caused by the analogue infrastructure.  However, in the long term, carriage fees are expected to continue in one form or the other .

     

    In all probability, strong channels (and those that are included in much-demanded broadcaster bouquets) will end up paying a reduced carriage fee, and weaker ones will pay a higher amount.

     

    The role of TAM

    TAM is expected to continue being the leading provider of viewership measurement services inIndia, since no method or technology is currently planned in any large-scale STB implementation program or any other system to find out which person in a household is watching which part of which program.  It may be possible to determine how many subscribers have subscribed to a channel by aggregating data from leading MSOs, but that is not a measure of actual viewership.

     

    Alternative business models

    Broadcasters and distributors can now think about implementing channels by using innovative methods to share risks and rewards.  Some such methods could be:

    • Broadcasters selling channels to distributors to exploit these in the form of ad sales and subscription revenues
    • Re-packaging existing channels for local audiences of MSOs and larger LCOs
    • Creating channels based on dubbed content from popular channels, to be rolled out as regional language channels across larger MSOs
    • Broadcasters, etc., distributing specially packaged film or music channels on a revenue-sharing basis

     

    The recent recommendation made by TRAI to limit the total advertising time on pay channels to 6 minutes per hour and FTA channels to 12 minutes per hour could also have a significant impact on the number of channels that continue to “go pay,” should such recommendations become the law.  Such a rule would boost transparency in TV distribution, and given that advertisers would not be willing to pay twice for the same audience reach, would also push up per-channel prices significantly.

     

    Moreover, in addition to regular revenue streams, new ones would emerge for MSOs.  For example, Hathway has demonstrated that it can generate 10-15 per cent of its revenues through broadband, and this could become a service other operators can also begin providing. Video on demand, gaming and niche content could also be provided at local levels.

     

    In summary, although the timeline for digitization is aggressive, the ordinance is a concrete step toward enabling systematic growth in the industry and more equitable distribution of revenue across the distribution value chain. All stakeholders are expected to benefit from the digitization process – transparency generally ensures this. It is, therefore, in the best interest of the industry that all stakeholders ensure that this initiative is implemented in as speedy a manner as possible, and make sure that no political, regulatory or any other road-blocks interfere in the process.

     

    Ashish Pherwani is Associate Director, Ernst & Young & Devendra Parulekar is Partner, Ernst & Young

     

  • The operators stood unanimous as they put their issues in front of I&B Ministry. The issues on which they wanted answers to varied from being given a 'chor' tag to why they should collect entertainment tax for the state government

    Cable operators take on I&B at digitization meet

    By Meghna Sharma

     

    With May coming to an end and only a month left for digitization, the Information & Broadcasting Ministry is trying its level best to get the stakeholders to a mutual consensus. A forum was organized by FICCI and I&B ministry in Mumbai to share some thoughts on ‘ India going Digital’.

     

    Present at the event, Supriya Sahu, Joint Secretary (Broadband & Policy) and Rajiv Takru, Additional Secretary of Ministry of I&B heard what the cable operators of the city had to say. It is not a hidden fact that cable operators aren’t very happy with the whole process. Deadline date, revenue share and carriage fee were some of the strong points put forward by them.

     

    Cable operators’ woes

    The operators stood unanimous as they put their issues in front of I&B Ministry. The issues on which they wanted answers to varied from them being given a ‘chor’ tag to why they should collect entertainment tax for the state government.

     

    Although the topic of revenue share was top of the list, none of the operators agreed with the 45:55 share with the MSOs and wanted the government to do something about it. “How will we survive?” they questioned. The cable operators want a bigger share in the pie; some even suggested of a full 100 per cent share.

     

    Some operators even went on to tell the government to re-work the deadline and launch a phase-by-phase change, wherein both analog and digitization be allowed hand-in-hand, with only a few channels being converted in the beginning.

     

    One operator even compared the cable operators with Jesus and said that they’ll be carrying the set-up boxes to their funerals. Availability of the set-up boxes is a major concern as many reminded the ministry representatives that MSOs have not been able to provide them with the boxes even as the deadline looms in. “How does the government expect us to meet the deadline when we haven’t been provided with the set-up boxes. We don’t even know if the demand will be met before the blackout. And how are we going to face the wrath of our customers when their television sets go blank?” questioned one operator.

     

    Carriage fee was a topic on which all of them agreed upon, stating that they alone shouldn’t be allowed to bear its burden. They also wanted the ministry to intervene and tell the broadcasters to bring out their rate cards as soon as possible so that they can, in turn, inform their customers.

     

    Ministry’s assurance

    Rajiv Takru, Additional Secretary of Ministry of I&B, confirmed that no matter the issues raised or problems faced, digitization will not be compromised upon. “There is still some confusion and doubts in many cable operators’ minds, but one needs to be very clear that digitization will happen and shouldn’t be taken lightly.”

     

    He advised the cable operators to start working on it as very little time is left. He added that it is cable operators’ job to go and talk to their customers about digitization becoming a reality soon. “Multi-system operators (MSOs) have been informed to provide cable operators with set-up boxes before the deadline of June 30 and they will have to follow suit. It is the cable operator’s job to convince customers to change before it’s too late to avoid the chaos.”

     

    He added that the rules of the game have been changed and if anyone is caught evading rules or indulging in any malpractice then according to the Cable Regulation Act, the person will be arrested and made to shut shop as it has now become a cognizable offence.

     

    The broadcasters have been informed and will bring out rate cards by end of this month, Mr Takru assured: “Broadcasters and MSOs have to go by the rules and have to come out with bouquet as well as a-la-carte channels. One needs to understand that digitization is a win-win situation. The customer will be able to chose and cable operators will be able to provide the best quality service.”

     

    Direct to Home (DTH) service is seen as the biggest opponent by cable operators and feel that DTH operators don’t want them to reach the deadline, especially with monsoons approaching as they do not get many customers in the season. To this Mr Takru assured cable operators stating that they shouldn’t see DTH as a challenge: “A lot of DTH operators are still waiting in line to get more channels as they don’t have sufficient signals/transponders whereas cable operators will be able to provide 500 channels to their customers.”

     

    No end to the chaos

    However, no concrete solutions came out of the meeting as the atmosphere at the forum heated up. The cable operators continued demanding the deadline to be pushed back while Mr Takru only said that their point has been noted.

     

    Furthermore, the cable operators didn’t let the MSOs present at the event speak their side of the problem or issues. The agitation ended when Mr Takru and Ms Sahu walked out of the venue citing shortage of time and the MSOs escaped with them.

     

     

  • As I&B Minister Ambika Soni meets stakeholders tomorrow to decide on the June 30 deadline, MxMIndia presents a status report from the 4 metros

    Ready, Steady, Go? Or Delay?

     

    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

     

  • I & B Minister lends a patient ear to industry stakeholders' issues with meeting the digitization sunset date of June 30 for Phase I; timelines to be discussed at the June 15 taskforce meet

    Decision on digitization deferred to June 15

    By A Correspondent

     

    In a closed door meeting between the Information and Broadcasting Ministry officials and industry stakeholders, I&B Minister Ms Ambika Soni is learnt to have given a patient hearing to the various concerns raised.

     

    With just 23 days to go from the notified sunset date of June 30 for Phase I of digitization of cable television, the industry stakeholders confessed to their lack of preparedness and shared individual concerns in great detail with the officials.

     

    MxMIndia has learned that the government made it clear that the purpose of the meeting was to take stock of the situation and not for an adjournment or a postponement. The government it seems wanted to hear the people who actually have to implement DAS.

     

    Sources tell MxMIndia that the Local Cable operators (LCOs) and the Multi System Operators (MSOs) complained about the lack of set-top boxes (STBs) and also informed the government officials that as of today only 20 percent installations (of STBs) have been completed. The LCOs also expressed disconcert with the prescribed revenue share and requested the government to revisit the matter. Broadcasters once again raised their concern over carriage fee. MxMIndia is told that all parties stated their respective concerns with none of them contradicting each other.

     

    While Ministry officials heard all the concerns voiced by industry representatives, there were no formal announcements made by the government on the timelines for digitization.

     

    The Ministry handed out forms to all parties present asking them to duly fill them out with details of the level of preparedness, issues and the time needed to achieve the task at hand. These will be studied by the Ministry and in the next task force meeting scheduled for June 15, there will be a comprehensive discussion on the timeline for Phase I.

     

    Sources tell MxMIndia that the industry was present in full attendance with all sections represented adequately. From the I & B Ministry, apart from the Minister, also present were, Uday Kumar Varma, Secretary, Rajiv Takru, Addl Secy and Supriya Sahu, Joint Secy (Broadband & Policy). Representing Telecom Regulatory Authority of India (TRAI) was Parameswaran N, Principal Advisor (Consumer Affairs/International relations/Broadcasting & Cable Services).

     

  • The taskforce convened by I&B secretary Uday Kumar Varma failed to announce whether the June 30 digitization is going to be delayed as has been demanded by many stakeholders.

    I&B pussyfoots on digitization. Decision on deadline to be announced this week

    By A Correspondent

     

    Sad. MxMIndia learns that yet again no decision on the deadline on digitization was taken at the taskforce meeting that took place this afternoon in the Capital. Mr Uday Kumar Varma, Secretary, Ministry of Information and Broadcasting chaired the meeting and Ms Supriya Sahu, Joint Secy (Broadband & Policy) was also in attendance.

     

    It may be noted that June 30 is just 15 days away, and it’s unfortunate that the Government of India appears clueless on whether digitization in the four metros should be imposed or not. The charade thus continues. DTH operators have been advertising that cable is going to be history in the four metros, local cable operators are protesting and broadcasters are wondering whether they should factor in digitization in their forward planning.

     

    A routine meeting with discussions on issues and state of preparedness for digitization took place between the taskforce members and ministry officials. While no new announcements were made on the matter, news agency PTI reports that Mr Varma said that a frank discussion took place on all issues concerning digitization and the government had taken note of all stakeholders’ views on the matter. Mr Varma said that the ministry had more clarity now on the state of readiness of various stakeholders. PTI also reports that the government is likely to declare its final position on the matter by next week.

     

    In a meeting held on June 8 between Ms Ambika Soni, Minister, Information and Broadcasting and industry stakeholders, the government hinted at a comprehensive discussion on timelines in the scheduled June 15 taskforce meet. The ministry also collected duly filled forms from all stakeholders present in the June 8 meeting to study and assess the preparedness for digitization for Phase I. While the ministry has maintained so far that there will be no extension of the notified sunset date of June 30, it was suggested in the meeting held on June 8, that any discussion or decision would be deferred till the next taskforce meeting on June 15.

     

    A member of the taskforce told MxM India after the meeting today that no decision or announcement was made during the meeting by the government and that the ministry is likely to announce its decision later next week. Another member of the taskforce however hinted that discussion on new timelines led to suggestions of a possible extension upto December 31.

     

    Shortly after the taskforce meeting the Local Cable Operators (LCOs) protested outside Shastri Bhawan demanding that the ministry revisit the matter of revenue share of LCOs. Speaking to MxM India, a local cable operator based in East Delhi said, “We are protesting against Rs 45 share for LCOs. Also there is no clarity on STB price by the government so every MSO is offering it at a different price. And the quality of STBs is also very bad so we are facing a problem with the same.”

     

    Meanwhile, the hearing of the Mumbai Cable Operator V/S I and B Ministry case which was scheduled today, June 15, has been postponed till Monday, June 18.

     

  • The I&B ministry has announced the fresh date for digitization in the four metros as November 1

    Digitization in 4 metros put off to November 1

    By A Correspondent

     

    Given the varied and protracted deliberations with stakeholders, the Government of India has announced that the sunset date will be October 31, 2012 for the four metros with a complete switchover from November 1 in Chennai, Kolkata, Mumbai and New Delhi.

     

    Here goes a prepared statement issued:

    The Cable Television Networks (Regulation) Amendment Act, 2011 has made it mandatory for switchover of the existing analogue Cable TV networks to Digital Addressable System (DAS) by December 2014, in a phased manner. In respect of four metros of Delhi, Mumbai, Kolkata and Chennai, the digital switchover is mandated to be completed by 30th June 2012.

     

    The Task Force, comprising of all stakeholders, constituted by the Ministry in April, 2011, has been monitoring the progress made by various stakeholders towards digitisation. The task force has also undertaken field visits and interacted with local stakeholders. Discussions have been regularly held with Broadcasters, Multi System Operators (MSOs), Local Cable Operators (LCOs), while the Ministry of Information & Broadcasting has been in regular contact with the concerned State Governments on this issue.

     

    Regulations on Tariff & Interconnection were issued by TRAI only on 30th April 2012 instead of being issued in January, 2012, as expected.  The Quality of Service Regulations and the Consumer Complaint Redressal Regulations were issued on 14th May, 2012 by TRAI. As per these Regulations, every Broadcaster and MSO was required to publish its Reference Interconnect Offers (RIOs) within 30 days of issue of the Regulation.  Another 30 days are required for negotiations between Broadcasters and MSOs.  Thereafter, the MSOs and LCOs arrive at agreements which enable the consumers to have a clear indication of the terms and conditions for installing Set Top Boxes and the prices of channels on an a-la-carte as well as on a bouquet basis.

     

    The second order of TRAI of 14th May, 2012, has mandated that every MSO or its linked Cable Operator has to put in place a Consumer Complaint Redressal System consisting of a complaint centre with toll free consumer care number, web based complaint monitoring system as well as appoint or designate one or more nodal officers and publish consumer’s charter for DAS.

     

    Both these orders of TRAI have not yet been substantially implemented.  As a result of this, the installation of Set Top Boxes has not picked up necessary pace for the completion of the process of digitalisation by 30th June, 2012.

     

    The assessment of these ground realities, compels the Ministry of Information & Broadcasting to set a new deadline.  It is, however, imperative that the modified target deadline is set with strict benchmarks to ensure that no complacency sets-in in the system and the new target date is achieved collectively by all the stakeholders.

     

    Therefore, keeping in view public interest and after intensive and extensive consultations, as well as written commitments from all the stakeholders, for fully implementing the regulations of TRAI, the Ministry of Information & Broadcasting has decided to modify the 30th June deadline for a complete switch over to 31st October 2012 for all four Metro Cities i.e Delhi, Mumbai, Chennai and Kolkata.

     

    All the TRAI regulations for DAS will come into effect from 01st November, 2012.

     

    The Ministry of Information & Broadcasting will closely monitor the process of digitalisation over the next four months.  The Ministry of Information & Broadcasting will issue warning letters to those going slow on their written commitments.  Needless to add that both, the Ministry of Information & Broadcasting and TRAI, will take action under the provisions of the Cable Act, wherever and whenever necessary.