Even as the progress on the ambitious digital addressable system (DAS) programme remains slow, the government is keen on meeting its revised deadline to digitalise Indian TV cable networks by December 31, 2016. To this end, the task force on implementation of Phases III and IV of DAS, during its 17th meeting held on August 31, 2016 asked several states to ramp up their efforts. It has sought active involvement of industry bodies and other stakeholders in pushing digitisation in laggard states through aggressive consumer education.
The DAS programme, set to change the face of cable TV and broadcasting industry, has been planned to be undertaken in four phases. Phases I and II were completed by March 2013. The first phase, which was expected to be implemented by July 2012, was completed in October 2012. The government had to revise its estimates of the number of cable TV households owing to discrepancies in data. Phase I included the digitisation of cable networks in Delhi, Chennai, Kolkata and Mumbai. The second phase was completed in March 2013, wherein about 18 million set-top boxes (STBs) were installed in 38 cities across 15 states. Of these, 13 million STBs were installed in homes with cable TV and the remaining in households with a DTH connection. This phase focused on removing monopolies in the cable TV market so that viewers have a wider choice.
The closure of Phase III, expected to be done by December 31, 2015, hit a roadblock when the multi-system operators (MSOs) of several states including Telangana, Andhra Pradesh, Maharashtra, Guwahati and Odisha approached their respective high courts for deadline extension. Industry experts believe that Phases III and IV would take three to four years to roll out as switching off analogue signals in 1,800-1,900 areas is not easy. Further, most of the areas covered under the last two phases are tier 3 cities and rural areas, which clearly lack basic digital infrastructure. Further, the progress on Phase IV remains disappointing. As per the data from the Ministry of Information and Broadcasting, states including Uttar Pradesh, Bihar and Karnataka have been the slowest in implementation.
Interestingly, in India, a delay in the execution of most of the government’s flagship programmes is common. However, what is more critical is that the project should ultimately be able to deliver the perceived benefits. DAS has been primarily rolled out with the objective of proper assessment of revenue collection from cable networks, which has been lacking in the analogue mode. Besides, quality service to consumers and availability of broadband services through cable networks are the other key objectives. Luckily, DAS has started showing early signs of benefits for the industry. As per the Economic Survey 2015-16, digitisation of cable TVs in Phase I and II led to an increase in the tax collected with both the centre and the states becoming beneficiaries of transparency in the system. Besides, DAS promises several opportunities to the various stakeholders in the cable TV and broadcasting ecosystem.
Stakeholder interests
India’s broadcasting distribution network comprises 6,000 MSOs and seven direct-to-home (DTH) operators.
During Phases I and II of digitisation, MSOs were able to retain 75 per cent of incremental subscribers, while DTH players garnered only 25 per cent of the market. However, the trend may change in Phase III as the markets covered under this phase lag in digital readiness. Regional MSOs will be required to park significant funds to ramp up their cable infrastructure in these cities. Besides, several MSOs do not have substantial presence in markets to be covered under Phase IV (mostly rural). Industry expects DTH companies to garner an incremental market share to the tune of 50 per cent in Phase III and this might go up to 70-80 per cent for the Phase IV markets.
DAS will also help in increasing the accountability of the cable distributors, which in turn will help broadcasters clock in higher revenues. In the current analogue system, it is estimated that broadcasters are able to recover only 20 per cent of the optimum subscription revenue because of under-reporting by cable distributors. For content providers, it may result in higher satellite revenues and opportunities like pay-per usage that will aid revenue growth. From a consumer’s point of view, digitisation is likely to result in a large number of pay channels, with significant improvisation in content. Consumers will now be able to watch niche channels, access value added services (VAS) and interactive services and video-on-demand.
Challenges and the way forward
In a bid to bring the aforementioned benefits to the respective stakeholders, several issues facing the implementation of DAS need to be ironed out. Most of the STB issued by MSOs come without proper warranty or guarantee. There lies a huge gap in the after-sales service and toll-free numbers at the customercare centres are not maintained by the MSO. Further, the use of unencrypted STB by the MSO leads to improper assessment of consumer size, resulting in loss of government revenue.
Going forward, digitisation is expected to usher in convergence across the media, entertainment and telecom segments. It will be a veritable game changer for the broadcasting industry and is likely to enhance the TV viewing experience as the country knows it today. Digitisation in rural areas will provide several VAS including broadband for consumers.
