Earlier this month, the ministry of information and broadcasting asked chief secretaries of states and Union territories to ensure completion of cable digitization in the light of complaints it has been receiving about analogue signal transmission in different parts of the country. In its letter, the ministry said that the complaints “are being sent to the concerned authorized officers, i.e. district magistrate, sub-divisional magistrate and commissioner of police, for taking immediate necessary action as per the extant Cable TV Act/Rules, but no response is being received in most of the cases from the authorized officers.” The note added that the authorized officers have the right to seize the equipment of erring cable operators, in order to achieve complete digitization of cable networks.
To be sure, the Cable Television Networks (Regulation) Amendment Act, 2011 had mandated a complete shift from analogue cable TV to digital addressable system (DAS) in four phases. Phase IV was officially completed on 31 March 2017.
However, according to cable TV industry estimates, between 25% and 30% of the total television households in Phase III and Phase IV areas are still using analogue signals instead of accessing digital signals via set-top boxes.
But the ministry’s recent note shows that the government means business. In fact, the cable distribution industry lauds the efforts of both the previous and the current government to ensure complete digitization of television distribution in the country.
“This is probably among the fastest digitization in the world. China is still in the process of digitizing its TV homes. The last five years have been hectic in making the shift from analogue to digital, and both the government and the Telecom Regulatory Authority of India have fully supported the distribution platform owners,” says Ashok Mansukhani, managing director of Hinduja Media Group that runs its cable distribution arm under IndusInd Media and Communications Ltd.
Anuj Gandhi, group CEO of IndiaCast Media Distibution Pvt. Ltd, the distribution company of TV18 and Viacom18, agrees. “The governments have been fairly focused in driving digitization. Although there have been certain extensions in deadlines, but given the size and diversity of the nation, the progress has been quite good. Getting 140 million homes digitized in such a short span is indeed commendable.”
Different distribution industry executives offer different figures on the number of digitized homes, varying between 130 million and 140 million. However, an estimated 37-40 million homes are yet to be digitized even though the deadline for a complete switch-over to addressable homes is over.
And most of these homes are to be found in rural India that saw poor compliance for several reasons, one of them being the lack of cable infrastructure—especially in far-flung areas. Experts say that compliance may have been better if the government had allowed infrastructure sharing for cable distribution. To be sure, distribution platform owners—like direct-to-home (DTH) and multi-system operators (MSOs)—according to their licensing norms, are not permitted to share the infrastructure for distribution of satellite television services.
Initially, the industry faced other roadblocks too. The unavailability of set-top boxes was an issue, as was the challenge to change consumer behaviour in a short span of time. Cable companies needed big investments to make the shift, while the local cable operators (LCOs) resisted the move for fear of losing control of the end consumer.
Yet, over the years, with increasing shift from analogue to digital TV homes, all the industry stakeholders have benefited. For starters, in the four years since digitization, revenue for the broadcast industry has risen at a compound annual growth rate of 15%-18%. “Under-reporting of subscriber numbers was the biggest roadblock for broadcasters in the past. Digitization brings with it transparency, which, in turn, has already led to an upside in subscription revenues. Although it is still a work in progress with cable platforms offering subscriber reports only from large cities (with population of a million-plus), the trends are extremely encouraging. With increase in bandwidth availability, there has been a significant drop in carriage costs vis-a-vis the analogue regime,” says Gandhi.
There’s been an increase in revenue from the LCO to the MSO, too. “While the platforms used to get paltry lumpsum monies from the LCOs in the analogue days, with digitization the MSO has been able to establish a per-STB (set-top box) monthly payout from the LCO,” he adds.
Last but not the least, digitization benefits have accrued to the consumers— more channels are available at far better quality and a significantly improved viewing experience. The consumer can exercise choice over what he/she wants to watch not only in standard definition but in high definition as well. Channels are provided by the platforms both on a la carte basis as well as in packages. According to Mansukhani, while 100% digitization is a myth, not achieved even in the US, by 2020 approximately 95% cable and satellite TV homes in India will enjoy the benefits of digitization.
However, he suggests that the government must activate all nodal officers to stop analogue signals and ensure an online Aadhaar-based registration of LCOs and MSOs. “This would stamp out dummy operators, a bane of the industry for the last 25 years,” he says.
Jehil Thakkar, partner at management consulting firm Deloitte India, feels that India is on the road to success as far as digitization is concerned. However, the objectives of digitization have been met only with partial success. “It’s commendable that the government still has its eye on the ball and continues to press ahead; however, the objectives—which were addressability, transparency in number of subscribers, digital billing and change in the pricing regime—have only been partially achieved and the responsibility to complete that rests with the entire ecosystem.”