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Cable networks to get digital edge, countrywide reach with HITS
New Delhi: With the Union cabinet’s go-ahead to policy guidelines on Headend in the sky (HITS), cable is set to become all-India, all-digital and addressable—all at once.

Under HITS, the main cable company, or so called multi-system operator (MSO), aggregates and encrypts all TV channels at one facility and uplinks them to a satellite. These signals—which come from a headend located on a satellite transponder rather than an on-ground control room—are then received by local cable operators affiliated with the cable company at their digital cable headends, from where they reach consumer homes via cable.

HITS offers a couple of advantages to the consumer. Unlike DTH (direct-to-home) service, cable TV via HITS has a return path and will, therefore, be far more interactive. So services such as video-on-demand and pay-per-view will be real time. That’s not all. Since HITS offers channels through a satellite with a national footprint, the customer could move to any location within India with his set-top box and operate it if his HITS operator has an on-ground affiliate in the new city.

Currently, the coverage of an MSO is confined to a limited geographical area close to its on-ground headend while a HITS operator’s digital signals would be available to cable operators all over India.

Digital cable offers more channels than analogue and since HITS will be digital, it would provide the subscriber with a wider content choice, better picture quality and value-added services.

Yet, media industry experts don’t see how HITS would benefit the consumer. Smita Jha, associate director, PricewaterhouseCoopers, said, “This will not affect the end consumer directly, though it will encourage more efficiency and transparency at the cable operator level.”

“In the short and medium term, the policy is unlikely to impact the end consumer. For the service providers, it makes sense to adopt it in the areas where the existing cable network is not present,” said Ritesh Chandra, executive director, Avendus Capital Pvt. Ltd, an investment banking and advisory firm.

Ashok Mansukhani, president of the Multi-System Operators Alliance and director with Hinduja-owned IndusInd Media and Communications (which owns cable distribution firm InCable), said that though it is a welcome step, a lot more needs to be done towards bringing about total digitization in the media sector. “A lot more clarity is required in terms of the pricing and the rights of the HITS operators. The government should now set up a special task force on how to make HITS work in the country.”

According to Anand Shah, media analyst at Angel Broking Ltd, the initial investment in HITSwill be steep. “However, the advantage is that it is a one-time cost and it makes sense for operators that have a high subscriber base, especially if they are targeting the non-cable areas. HITS needs one point of operation and does not need to set up multiple bases,” he said.

However, not many big cable operators are keen to apply for a HITS licence. Anuj Gandhi, chief executive officer of DENNetworks Ltd, which has around 10 million cable subscribers, said: “We have no immediate plans of adopting HITS. Our existing technology is working well. We would rather go in for more fibre leases than create any new infrastructure.”

However, Mansukhani adds that with 74% foreign direct investment allowed in HITS, big cable firms such as Comcast Corp. and Liberty Media Corp. could be interested in the business in India.

The Telecom Regulatory Authority of India, which regulates the cable business, estimates that the cost of conversion of the existing nearly 6,000 analogue cable headends from one-way analogue cable network to one-way digital cable network works out to Rs15,000 crore. Introduction of HITS can bring down this cost to around Rs1,200 crore with some recurring cost.

A HITs licence costs Rs10 crore, involves no annual fee and requires that the applicant have a minimum net worth of Rs10 crore.

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