(30 October 2006 6:00 am)

MUMBAI: Catvision, a provider of cable TV and broadband networking products and services to the cable television and hospitality industry, has initiated a restructuring of its operations into two main divisions: cable television equipment (CATV) and interactive television systems (ITV).

The two businesses of the company, namely sales of cable television equipment and sales of interactive television systems, are expected to grow with the implementation of the conditional access system (CAS). The CATV division develops manufactures and markets networking equipment used in cable television system wherein the major client base is cable operators.

In the cable television sphere, the competition from direct-to-home (DTH) is expected to trigger digitalization of cable networks in India. It is expected to provide a huge hardware opportunity since this would require large scale upgradation of all existing networks. This in turn would provide a business opportunity for the company.

According to a media market analyst, "In case the cable distribution business becomes more organised with the implementation of CAS, the fortunes of the company will turn." DTH itself is set to create a massive market for dishes, set top boxes and IF distribution system (for multi-dwelling units), all markets the company can address.

The government's intention to implement of CAS in Delhi, Mumbai and Kolkata by 1 January 2007 and also the aggressive launch of DTH services by Dish TV and Tata-Sky, has for the first time provided a serious competitive threat to cable operators. These developments are likely to transform the cable television landscape. The only way forward for cable operators is to digitalize their networks and professionalise their services. Only then they will be in a position to compete with DTH, avers the analyst.

In the US, cable still maintains 80 per cent of the market share. If digitization were to happen - and there is every reason to believe it will - it will throw up an enormous market for digital cable hardware. In addition, manufactures of cable television equipment are equipped to manufacture DTH products since they are technically similar.

To address these above business opportunities Catvision has set up a manufacturing facility at Dehra Dun in Uttar Pradesh for digital cable and DTH products and to expand its marketing operations in ITV and CCTV.

The company has also forayed into security systems, starting with high-end digital CCTV systems targeted at premium hotels and shopping malls, which is driven by the heightened security risk perceived by public institutions from terrorist threat.

The ITV division installs, operates and maintains cable satellite television and interactive television systems. Major customers are premium hotels in India and the Middle East (where the company operates through distributors).

US based KoolConnect Technologies, a supplier for in-room entertainment solutions recently picked up a small stake in Catvision through a preferential allotment.

The company has also joined hands with a UK based firm Dedicated Micros, worldwide provider for CCTV surveillance applications and will be offering their systems in India. With this tie-up, the company believes it can address another emerging segment -- shopping malls, which also have concerns of security.