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Cable ops to focus on multiple revenue streams; land grab phase over
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NEW DELHI: Build a robust subscription income, digitise rapidly and develop broadband as a revenue stream. That seems to be the business model all the leading multi-system operators (MSOs) are going to chase after having spread their tentacles across the country.

"The land grab phase is over. There will be truce on the ground and MSOs will now focus on developing other revenue streams," said Digicable Network (India) Pvt Ltd managing director and chief executive officer Jagjit Singh Kohli.

Speaking at the India Digital Networks Summit 2009, Kohli said Digicable had set up 26 head-ends across the country and would continue to invest in infrastructure. "The answer to growth lies in value-added services," he added.

Consolidation and last mile acquisitions will continue as MSOs raise fresh capital. Hathway Cable & Datacom and Den Networks are tapping the capital market and the two listings would have a significant impact on how the sector can find funding to support expansion opportunities.

MSOs also need to build a revenue model on digitisation where Cas (conditional access system) is not mandated. "The digitisation process within the cable industry does not have any extra earnings for the MSOs. There is no payback on digitisation. We have to collectively address the issue of building a revenue model on the digital set-top boxes," said You Telecom India SVP and head of video business Neeraj Bhatia.

Bhatia also emphasised on growing the broadband business as a strong revenue pipeline. "In the US, for example, broadband has come first before IPTV. It is a strong revenue stream for cable companies like Comcast," he said.

With local cable operators under-reporting their subscriber figures and the government yet to lay out a clear roadmap for digitisation, MSOs are searching for a viable business model. "We need to know the regulatory flight path. How can we build a business model without that? We want to go for a public float only with a proper clarity on our growth path," said IndusInd Media & Communications Ltd managing director and chief executive officer Ravi Mansukhani.

MSOs are also planning to invest in local cable channels in smaller towns. "There is a business opportunity in local news and event-based cable channels in tier-II towns. In metro markets where satellite channels have mushroomed, it is difficult to find a business proposition for such cable channels," said Mansukhani.

Atria Convergence Technologies, a Bangalore-based MSO, has experimented with IPTV. "We have a presence in three states. We have launched IPTV. MSOs have to search for new revenue streams," said Atria managing director Sunder Raju.

Tandberg Television VP business development Noel Matthews stressed on the need for cable TV operators to provide differentiated services. "In Western Europe, for example, each platform had to figure out how to differentiate themselves from other service providers. Cable operators need to do the same here. In India, video-on-demand has a great future," he said.

MSO Alliance president Ashok Mansukhani pointed out that cable TV has a distinct advantage over DTH as "India is a value-for-money market."

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