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Amid
much uncertainty, there are a few certainties
that are emerging. Speaking at the Summit,
Ms Asha Swarup, Secretary of the Ministry
of Information & Broadcasting left the
Summit's 350+ delegates in no doubt as to
who will look to be the sole policy maker
for all aspects of broadcasting and pay-TV
in the future. "We are seeking to put
in place regulation which will allow the
setting up of a regulator that will regulate
the broadcasting industry," she said.
"It will oversee regulation of everything
from content to carriage. All the other
contentious and controversial issues will
be kept out of this regulation and will
be dealt with separately."
In
response to a six-point plan from MPA and
ITV to help unlock value from the 75-80
million subscriber strong cable industry
and set it free, Telecom Regulatory Authority
of India permanent advisor Rajiv Choubey
stated that some of the points were being
taken up including increasing the FDI cap
in cable from 49 per cent to 74 per cent.
"We have recommended the FDI cap at
74 per cent in cable and also HITS or headend
in the sky, a mechanism that will drive
higher deployment of digital cable but at
a lower cost." Secretary Swarup responded:
"We think it is a very sensible recommendation.
But we are looking at how the FDI component
should be viewed as a policy in general.
Should this also include FIIs? The problem
is how to calculate the FDI component."
Lord
David Currie, chairman of Britain's telecoms
regulator Ofcom, had stated earlier in the
day that there were no limitations on FDI
in the UK media and communications market
and that this had helped cable and satellite
operators upgrade their networks to digital
and broadband. Higher FDI norms in the cable
sector will help cable operators access
the capital to fund digital upgrade and
drive consolidation. In a presentation made
at the start of the day, MPA conservatively
estimated the headline cost of bringing
digital cable into 30 million homes at between
$ 1.5 - 2 billion in terms of just software
and hardware costs.
While
cable MSOs such as Hathway Cable have received
a capital infusion of about $70-80 million
and have deployed digital to over 360,000
homes and have begun acquiring last mile
operators, others have stalled due to lack
of capital, incentive and strategic execution.
"This will slowly change," said
Brahmal Vasudevan, managing director of
Chrys Capital, Hathway's new investor, "but
price caps are a big problem for us and
also the lack of scale and availability
of national MSOs."
Deals
however are still being done, boxes are
being rolled out and channels are being
launched. DTH pay platform Tata Sky has
about 1.3 million. subscribers and says
that in spite of incoming price competition
from new entrants in the market (Sun TV,
Reliance, Bharti), Tata Sky can still retain
pricing power. "Reliance and Bharti
are sensible companies, publicly-traded
with healthy EBITDA margins, " Vasudevan
said, "they are not necessarily going
to sacrifice that to buy market share at
any cost."
That
said, Tata Sky CEO Vikram Kaushik pointed
out that DTH had to be regulated in the
same way as cable with respect to pricing.
"...if my main competitor is offering
digital to consumers at a capped price and
enjoying the benefits of lower content costs
through wholesale caps, I want the same
deal," he said. "I am asking all
the content providers today to accept lower
rates to help seed the market with set top
boxes because otherwise the economics of
the market are just not going to work."
The
slow spread of CAS is worrying the MIB,
Swarup revealed. "We are conducting
studies to find out why it has been slow,"
she said. Choubey said that for CAS to spread
faster, policing would have to be in place,
and strong enforcement too.
But
the consensus was that digitization and
conditional access are the best way to organize
the fragmented Indian cable TV sector with
its 60,000 or so last mile operators spread
out nationally. Within two years, the cable
sector will be more orderly," said
Jagjit Singh Kohli, whose new cable company
Digicable has a gameplan to roll out analogue
cable first, followed by digital cable nationally.
"But you will see consolidation accelerating
within a year."
Peter
Mukerjea, chief strategy officer of INX
Media, which is launching nine channels
starting from next month, funded by Singaporean
financial colossus Temasek, said, "The
market can deliver in the economic and industrial
context. There is enough demand from consumers
and new segments of the economy for new
channels and programming catering to new
audiences. The audience is jaded with some
of the existing tired formats. We have a
new paradigm coming where one single broadcaster
will no longer have 40 of the top 50 programs
-- it's already changing, you will probably
get 5-6 competing networks, snapping at
each other's heels with only a few ratings
points separating them. The growth of DTH
is also encouraging - I do not agree with
price caps but digital is growing and next
year will see even more volume."
"We
have been talking about digital for an age
but apart from DTH, it's not really happening,"
said Sameer Nair, CEO of news broadcast
major NDTV's upcoming entertainment network
NDTV Imagine. "But no one really is
counting on a big digital boom in the next
1-2 years - it's all predicated on a high
level of advertising growth that flows from
programs and shows and innovation. That's
the deal."
Also
Read:
Trai
recommends 74% FDI in HITS
Govt.
to keep out controversial clauses in redraft
bill: Asha Swarup
Digitalisation
slow in India
Content
cost too high to support low ARPUS in DTH
Cable
companies need to lift ARPUS to turn profitable
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