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Trai's proposal to push subscription rev up: Hathway

Indian broadcasting industry is all set to go for a complete digital makeover. K Jayaraman, CEO, Hathway says that the telecom regulatory authority of India’s (TRAI) recommendation for complete digitisation will push subscription revenue for cable to jump significantly.

In an interview to CNBC-TV18, Jayaraman elaborates that the move will be beneficial as the cable and broadcasting in India will see a huge upside.

Regulator TRAI has recommeded a four-phase digitisation process for cable TV networks in India while setting a sunset date of 31 December 2013 for complete switchover to digital cable.

The first phase shift from analogue to digital cable will happen in the four metros - Delhi, Mumbai, Kolkata and Chennai. Trai has set a deadline of 31 March 2011 for this.

Below is a verbatim transcript of the interview. Also watch the video.

Q: Is it doable according to you this December 2011 sunset and what does it entail and what does it mean for companies like yours?

A: I think it is a great opportunity to move to digital. TRAI has absolutely paved the way for us. I am sure with the cable and DTH being there—DTH anyways is digital—it is a great opportunity.

Q: Even if you work with just four metros which is the first phase, what kind of opportunity does this open up for you in terms of how many digital homes you can add by next year itself?

A: I cannot speak on behalf of Hathway because I am in a silent period because our quarterly results are not yet out. But overall for the cable and broadcasting, it’s going to be a huge upside because the biggest problem for the broadcaster itself is going to be the kind of subscription revenue, which is a big problem. I think digitalisation is going to pay broadcasting industry to grow and if the broadcasting grows the downstream is cable and DTH, so they’re grow and its going to be a huge benefit for the broadcasting industry.

Q: What percentage of the total under declaration that happens today goes away by December 2011 once all the cities of one million plus come into digital—from calculation of the percentage of overall revenues collected from these cities?

A: Empirically, wherever CAS has been there—digitalisation has been there—in a mandatory sense and about 70-80% could be taking the pay channels something like that. It could be a ratio of, if it was one now, it could be 1:4.

Q: There is a few other incentives mentioned—there is a 7 year tax holiday, there is a basic customs duty on set top boxes that maybe waved—are these all part of the wishlist of your industry or has this come as a bonus?

A: It is normal. There is no big deal about all this customs duty and other things because eventually when you are going to compete with DTH, at the end of the day, what the consumer would get a price is going to be important.

So whatever customs duty is, it is going to be very material duty reduction or something. At the end of the day we have to compete with DTH and that is how it is going to be.

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