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Help Get set-top boxes before it’s too late
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KOLKATA: If you have not opted for a set top box (STB) till now, contact your local cable operator at the earliest . Or else, be prepared to stare at a blank television screen.

Once cable transmission mandatorily switches from analog to digital platform five months from now, TV sets without STBs will go blank. Once that happens, all hell will break lose in millions of homes as the daily doze of entertainment will disappear from lives of the citizens.

If the Telecom Regulatory Authority of India (TRAI) sticks to the Ordinance on Cable Television Networks (Regulation) Act, 1995, the switch from analog to digital transmission will have to be completed in Kolkata, Delhi, Mumbai and Chennai, by June 30, 2012. From the next day, only digital transmission will be beamed to cities.

"It isn't just pay channels that will disappear after the digitization deadline. People will not be able to tune into free-to-air (FTA) channels either. STBs will become compulsory for viewing any cable channel ," said DigiCable vice-president Amit Nag.

With just over five months to go and no urgency visible yet, there are serious doubts over whether the new system could be effectively rolled out in so many households. As state minister Madan Mitra pointed out, "If the cable TV switches off for even five minutes, it feels as though life has gone out of our lives. We get disconnected from the world."

Though multi-system operators (MSOs) like DigiCable, SitiCable, Manthan, GTPL-KCBP , Den, AMBC, Howrah Cineline, DigiCable and Kailash Cable expect TRAI to extend the deadline by at least two months, they acknowledge the roll-out logisitcs will pose an immense challenge.

"MSOs have to seed STBs in nearly 27 lakh homes through cable operators. That is a herculean task. We have to begin pushing STBs aggressively mid-next month. Viewers, too, need to come forward and embrace the technology. While demand for STBs will peak as the deadline approaches, unless it is spread over the next four months, there will be utter chaos thereafter," warned SitiCable director Suresh Sethia.

The entire Kolkata Metropolitan Area (KMA) - Kalyani in the east to Maheshtala in the west, and Bally in the north to Barasat in the south - will come under the digitization ambit. According to industry estimates, there are 33 million television homes in KMA, of which 2.8 lakh subscribe direct-to-home (DTH) while 3 lakh have STBs from cable operators.

Of the latter, 2.7 lakh homes are in Alipore, New Alipore, Behala and other areas west of Tolly's Nullah where conditional access system (CAS) was rolled out in 2007 before implementation in rest of the city was put in the back burner following political opposition. It was perceived that the move would not only adversely affect cable operators, but also push cable TV beyond the reach of millions living in slums.

The digitization attempt was again revived on December 13, 2011, when a bill was passed in the Lok Sabha with the government assuring that it will not harm operators or subscribers.

"Digitization will allow viewers to watch and pay for only those channel they wish to see," information & broadcasting minister Ambika Soni had said after introducing the Cable Television Networks (Regulation) Second Amendment Bill.

Touted as a major step towards reforming the murky TV network, digitization is expected to boost subscription revenues for broadcasters as it promises to end hefty carriage fee they pay to cable operators. In the absence of an addressable system, the subscription revenue transaction between the broadcasters, MSOs and local cable operators is determined on the basis of fixed fee or negotiated subscriber base.

Given the strong bargaining power of cable operators that own the last-mile connectivity, the distribution of subscription revenue is heavily skewed in their favour. According to estimates, local operators declare only 15% of their paid connectivity to MSOs and broadcasters.

This not only deprives the MSOs and broadcasters of their fair share, but also results in service tax leakage for the government. The lack of trust and transparency in the business models of the industry has also led to frequent disputes between stakeholders and increased litigation.

"Once digitization happens, there will be addressability and transparency, issues that have dogged the industry and tainted the players for two decades. Not only will it streamline the industry, it will lead to improvement in quality of viewing. People will also be able to view more channels. The government's revenue share will also increase," Cable TV Equipment Traders & Manufacturers' Association (CTMA) secretary K K Binani said.

The rollout though remains a concern as STB manufacturing firms in China, Taiwan and Korea need at 30-60 days to ship the consignment to Kolkata. Thereafter, technicians need to install the STBs in cable homes. Apart from an investment of Rs 450 crore in procuring STBs and Rs 200-250 crore in developing the digital network, MSOs and local operators will have to radically change the way they function.

"We have already begun training our staff in technology, hardware , marketing, customer care and billing," said Sethia.

Nag, who has been pitching for digitization for years, believes momentum will pick up once TRAI announces the price strategy. That should happen some time in February after consultation with stakeholders concludes. The association of cable operators from Kolkata is yet to file its recommendation before the regulator.

While the CAS regime had two offerings: a basic package of 30 FTA channels for Rs 72 plus tax in addition to packages and a-la carte with price of each channel capped at Rs 5; there is no decision yet on what the basic tier service will be. Furthermore, it isn't clear yet if TRAI will impose a cap on channel price or allow broadcasters to price them as they wish.

"I think a basic tier should comprise 85 channels that are currently available on analog, including 45-50 FTA and 30 pay channels. The price can be around Rs 160. People can add more pay channels by paying additional amount. Of course, the price cannot be higher than DTH where the charge varies between Rs 200-250 per month," said Sethia.

WISH LIST

Cable TV industry has sought tax incentives from the state and Centre to tide over the difficulties in transition from analog network to digital It has asked the state government to remove anomalies on VAT rates so that all equipment needed for the upgrade is taxed at 4% instead of 4 to 13.5% The industry has also sought income tax holiday for five years as well as waiver of service tax of 10.3%, arguing that the industry was not an entertainment but an essential service The state government has also been asked to let go of the entertainment tax of Rs 10 per subscriber

SCREEN COUNT

No. of homes with TV in India: 14.7 crore Houses with Cable TV: 9.4 crore Houses with DTH facility: 4 crore Rural houses with antenna: 60 lakh TV homes in KMA:33 lakh DTH homes in KMA: 2.8 lakh CAS homes in KMA:2.7 lakh Non-CAS STB homes in KMA: 30,000 No of TVs: 40 lakh STB price: Rs 400-700

Operators' equipment

Fibre optic cable Coaxial cable Optical transmission equipment Digital head-end

Source: The Times Of India

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