digitalisation of cable tv (1)

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viewing experience.

What does Digitization mean?

Digitization is a process which converts the information into digital format. In

this format, information is organized into discrete units of data (called bits) that

can be separately addressed (usually in multiple-bit groups called bytes).

Digitization helps preserve the data for long term basis.

Television signals can be received via aerial for terrestrial reception, via satellite

as in case of DTH, via broadband connection as in the case of IPTV or via cable

from the local cable operator.The reception of television signals through satellite

and broadband connection are already operating in digital mode and

Government has, as a policy initiative,taken a decision to switch over to digital

mode for reception of TV signals both in terrestrial mode as well as through

cable from local cable operators.The switch over to digital mode for cable TV

systems shall take place in phases and the first phase for digitalization of Cable

Television shall take place in Delhi, Mumbai, Kolkata and Chennai by June 30,

2012.

Digitalization of Cable TV put in simple words means,delivery of digital TV signal

to the door-step of viewer.With this technology the viewers will get superior

picture and sound quality, large bouquet of channels, choice of channels, games

and movies on demand.The digital cable TV service will be available through a set

top box.

With the inclusion of digital TV into the market the following features will be

available to the consumers:

High definition digital television offers higher picture resolution as well as

clarity compared to analog receivers.


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Data casting either it is SDTV or HDTV, the greatest advantage of digital

transmission is that broadcast streams could be compressed that opens the

chances of using the spectrum to other purposes.Aside from programming,

stations work in wireless network with ability of data casting or transmission

of data in television signal that exceeds picture as well as sound for typical

television program. Such data which has been data cast through television

station could be received in workplaces, schools as well as homes through

digital tuner on digital television.

Multicasting compression methods allows television to transmit not only

single flow of high definition programming but multiple streams to digital

receiver programming with high quality of audio and video output. This

enables television stations to give more and diverse services to audiences

simultaneously.

More channel programming digital television are capable of giving more

than 200 channels.This also depends on subscription, service provider and

the capacity of the set top box.

Interactive features digital television can provide extra coverage and

further interactive features.

Less interference since it gives its users with better quality of sound and

picture, chances of experiencing crackling, hiss, ghosting and interference is

less.

Radio with digital sets,more than 20 radio channels will be available

Such features make digital TV a good investment for the consumer and the

industry in terms of content and clarity.

The Information and Broadcasting (I&B) Ministry has accepted the


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recommendations of the Telecom Regulatory Authority of India (TRAI) for

implementation of digital addressable cable television systems in India, to

transition from the existing analog cable network.The four metros will go digital

this year and rest of the country by December 2015.

Industry Structure & Challenges

The cable and satellite television market in India had emerged in the 1990s and

has since then experienced a strong growth in terms of number of subscribers

having grown from mere 400,000 in 1992 to around 90 million today,

representing a CAGR of 35 percent in the last 18 years.

The channels seen on TV (pay channels or free to air channels) are created by

different broadcasters and transmitted from satellite to receiving stations (headends) owned by MSOs.

The MSOs in turn re-transmit these signals through

cables to the LCOs, who have their own last mile cable network to individual

homes.

Under-reporting of subscriber base by LCOs

In the absence of an addressable system, the subscription revenue transaction

among the broadcasters, MSOs, and LCOs is currently undertaken either on a

fixed-fee basis or on the basis of a negotiated subscriber base. Considering the

strong bargaining power enjoyed by LCOs who own the last mile, the

distribution of subscription revenue in effect remains heavily skewed in their

favour.As per the industry estimates, LCOs declare only around 15 percent of

their paid connectivity to MSOs and broadcasters.This not only deprives the

MSOs and broadcasters of their fair share of value,but also results in service tax

leakage for the government.The lack of trust and transparency in the business

models of the industry has also led to frequent disputes between stakeholders


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and increased litigation incidences.

Non-standard pricing

In a market survey commissioned by TRAI and conducted by reputed research

firm MDRA, it had observed that the average monthly cable bill for a subscriber

varied widely from Rs. 149 in Kochi to Rs. 322 in Shillong, even though services

being provided did not warrant such variation.This apart, there are instances

where the cable charges are increased by LCOs for a locality arbitrarily.These

shortcomings are the natural fallout of the local monopoly status enjoyed by

most LCOs and small MSOs who are able to avert competition and thus prevent

free market forces to keep prices under check.

Capacity constraints in analog cable

The number of television channels in India has grown at a rapid pace from two in

1992 to 120 in 2003 to around 800 at present.Arrival of a plethora of new

channels in the Indian television space in the backdrop of limited bandwidth of

the analog cable system, results in allocation of prime frequencies by MSOs to

channels offering higher carriage (or placement) fee. Limited capacity, coupled

with the absence of an addressable system,has also resulted in limited availability

of subscription-driven niche content such as science, golf as well as

technologically advanced content like high-definition (HD) channels.This trend

is further fed by the inordinate dependence of broadcasters' revenues on

advertising(less on subscription) impacting niche content offerings since focus

tends to shift on advertisement friendly genres.


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Revenue Systems

The current revenue models being followed by the media industry are the

following:

Advertising - Advertising is the most common of all revenue models in

traditional media and online.TV shows, newspapers, and websites offer their

content (programming, news stories, etc.) at no charge (or at a low price) in

order to attract a large audience. Advertisers wanting to promote their

products, pay the media outlets for placing ads in between their content.

Advertising is most commonly used in media outlets that 1) can't cover their

entire costs just by selling their content (like newspapers and magazines),and

2) would have little to no audience if they charged (or charged more) for their

product.

Subscription - Subscriptions are great for media types that are continually

being updated - think a newspaper, a magazine, or cable TV - or have some

kind of ongoing value - think websites like LinkedIn or informational

databases. Subscriptions are popular with media companies because they

provide steady revenues over time.This revenue model doesn't work with

media considered a commodity - something you can get elsewhere for little

to no cost.An example of a media commodity is news - you can get it all over

the web,so paying for a subscription to a news website means that site should

provide significant value beyond the common news found elsewhere.The

Economist and the Wall Street Journal are examples of news websites that

offer significant value beyond what you might find for free on Google News.


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Pay-per-item - The pay-per-item model works for media types that come in an

individual package, offer no ongoing value, and are sustained through sales

alone.An example of this is a pay per view movie on cable, a movie ticket at

your local theater,or a CD or DVD.

Merchandising - Media companies use merchandising as a secondary, or

ancillary, income.This is popular with recognizable media franchises whose

fan base would want to purchase related items.An example might be the

merchandising efforts of a company like Disney, which produces and sells

merchandise for all of it's big-budget movies and TV shows. Many times,

merchandising efforts earn more income than the media product it

references. For example,the original Star Wars movies earned more income

through merchandising than through ticket sales.

The pay-TV value chain in India has three main elements (see Figure 1):

Broadcasters on one side

distributors in the middle consisting of a combination of multi-system

operators (MSOs) and local cable operators (LCOs) on the cable side, and

direct-to-home (DTH) players on the satellite side

Customers at the end of the value chain.

Most players will benefit from the digitization process (with the sole exception

of LCOs), though the extent of benefit and the execution challenges faced will

vary.

LCOs will suffer as a result of the complete transparency.In the current scenario,

LCOs are required to report the number of subscribers for which they provide

last-mile access to the MSOs,for revenue-sharing purposes.However,the lack of


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digital systems (and hence lack of transparency) allows LCOs to significantly

under-report subscriber numbers.

MSOs will reap the greatest benefits and bear most of the challenges in terms of

subscribers,MSOs will get a share of revenue from a significantly larger volume

of subscribers (as LCOs will be unable to under-report).In terms of ARPU,they

will see an upside because of:

Subscribers consuming and paying for value-added services, such as highdefinition channels and VoD

The opportunity to bundle broadband to some digital customers.

The former is expected to increase ARPU rates from INR150 per month to

about INR180 per month. Broadband bundling could increase this to

INR220.The gain in subscription revenue will be partially offset by MSOs earning

lower carriage revenue from broadcasters.Additionally, as MSOs pay content

costs to broadcasters (calculated as a proportion of the subscription revenue

that MSOs earn), this cost will grow in line with any increase in subscription

revenue.Overall,MSOs will be in a much healthier financial position:revenue per

-subscriber is expected to increase fourfold (excluding the potential upside from

broadband bundling), and operating margins are also expected to show healthy

improvement. However, MSOs will also bear most of the execution challenge

associated with meeting the aggressive digitization deadlines. The financial

pressures associated with digitization could drive consolidation among the

smaller MSOs, which have limited access to capital. Furthermore, about 20% of

analogue cable-TV subscribers are expected to churn to DTH (instead of

migrating to digital cable) to avoid paying additional costs for set-top boxes. If

MSOs fail to execute the digitization process successfully, then the churn from

analogue cable to DTH could be even higher.


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Investment is the biggest challenge in the digitization of the television network.

The investment is high while the return is not as impromptu.Finding investor for

the project, who would seek long term ROI is tough.This apprehension could

also be due to inefficient system and ample number of players in the market.

Due to ample number of stakeholders and old players,the distribution of money

is another issue of concern.Broadcasters,MSO's,LCO's would be the key stake

holders.According to the data available,there are around 60-70 thousand LCO's,

100 MSO's and around 6-8 thousand independent cable operators.There would

be friction from this side of the society which will prohibit equal development in

this sector as they will have the notion of being unemployed.

Another setback in finding investors would be hazy ownership.Due to inefficient

system and political involvement ownerships and partnerships aren't well

defined, which creates issue in distribution of profits. Customer's disinterest in

paying for content is another problem. People assume as they are paying all in

totality all the channels are free.

Implications of Digitization

Broadcasters Since digitization would bring about full addressability, it would

eliminate the menace of under-reporting of subscriber base by LCOs.This will

increase in subscription revenues for broadcasters. Further, the increased

capacity of digital distribution channel is likely to spur greater investments by

broadcasters toward niche,targeted and HD content and lead to diversification

of their revenue streams.The carriage costs paid by broadcasters to distributors,

which currently remain high in view of the limited bandwidth of analog cable,may

decrease post digitization.However,the extent of correction would hinge on the


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growth in the number of channels going forward - a high growth is likely to

maintain high carriage costs for broadcasters

Investors Upon successful implementation of the digital mandate, gradual

consolidation of LCOs will become inevitable.This will shift industry profits and

value to centralized distribution platforms and broadcasters.Valuations for cable

/ pay-TV operators in the USA,Korea and Taiwan during their high-growth value

stage typically averaged 1216x one year forward EBITDA, versus the current

trading average of 9-10x for India's listed cable/pay-TV entities. Subject to

successful execution of the digitization roll out, similar rise in valuations for

companies in India is being assumed.

MSOs Many of the large MSOs till now have remained heavily focused on

inorganic growth (mainly through joint ventures with smaller MSOs) in a bid to

acquire control over the last mile which is a key competitive advantage.With the

threshold subscriber base having been secured, the industry appears set to

pursue digitization next. Having indirectly acquired end-customers, the MSOs

now face the challenge with respect to customer retention. For a secondary

point acquisition,the industry players face the risk of losing the acquired LCOs

to another MSO;and for a primary point acquisition,there is the risk of losing the

end-customer to alternate technology platforms like DTH and IPTV.Thus, it has

become imperative for cable distribution companies (MSOs) to pursue

digitization aggressively which could increase acquisition costs for competitors

and switching costs for customers. With the necessary investments in

digitization, MSOs get a direct access to the customer end, paving the way for

better quality service and transparency in subscriber base.The direct access to

customers effectively shifts the bargaining power from LCOs to MSOs. MSOs


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also benefit from this consolidation eventually leading to a greater bargaining

power with broadcasters.

Government and the economy If the current analog cable distribution

model remains in place and digital penetration is limited, there would be

cumulative value of the tax receipts lost by the government (some estimates put

this at US$11 billion over the next decade or >US$1 billion per year). The

government therefore has sufficient incentives to push digitization. Digitization

will also help the government pursue India's broadband goals and thereby help to

boost economic growth. Potentially, a 10% increase in broadband penetration

would increase India's GDP by ~1.5%.As of September 2011, broadband per

capita penetration in India was only 1%. In its National Broadband Plan, the

Telecom Regulatory Authority of India sees a pivotal role for cable operators

with digital network upgrades paving the way for broadband growth.

Consumer choice Digital cable TV will improve the consumer experience and

resolve legacy issues from analog cable services. Consumers will gain access to

(1) More TV channels; 2) Attractive tiering options with differentiated content

across local,regional and niche genres;(3) A better viewing experience; and (4)

Improved quality of service. Digital cable TV will also be affordable for the

consumer. As per international benchmarks, spending on pay-TV typically

accounts for ~5% of GDP per capita. In this context,digital cable TV in India will

be affordable given heavy subsidies on STBs (currently subsidized at ~60-70% by

MSOs), which will ensure that consumer spends fall within the 5% benchmark.

Consumers will also benefit from new competition as digitization in metros

ensures that seven DTH satellite platforms (including free service DD Direct)

compete for customers with digital cable operators.


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Cable transformation Some estimates expect a 6x increase in subscriber

revenues for cable MSOs though not without at least a 20% churn in the cable

subs base to DTH. Subscriber declaration levels are expected to increase from

15% currently to 100%, while the retained ARPU will increase by 6x, after

assuming a 30% base case revenue share with the local cable operator (LCO).

Additional drivers and differentiators will come from bundled broadband and

high-definition (HD) services. Broadband will reduce the payback period on

digitization; under a bundled model, the payback period could be reduced by a

year to 24 months, as opposed to 36 months under a standalone digital

proposition.The main challenges,apart from managing subscriber churn to DTH,

are:(1) Carriage and placement (C&P) fees will drop by about 2050%; and (2)

Incentivizing revenue-sharing agreements have to be struck with LCOs in order

to drive digital into the home.

DTH operators Phase I digitization in the four key metros offers a good

opportunity for DTH operators to grab high-ARPU customers and increase the

platform's reach in larger TAM markets.MSOs envisage about 1520% churn in

cable subs to DTH though some suspect this could grow to 30% in the early

stages of Phase I deployment. Subsidized HD offerings will also act as a key

differentiator for DTH players as few cable operators have rolled out HD

services.

Challenges in the Digitization Process

According to the data available,the number of households in which set top box is

to be placed is around 80-100 million,which included both urban and rural area.

Both the areas are to be approached at the same time to avoid digital divide and

any misinterpretation or lack of information.


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In the transition towards digitization there are bound to be implementation

challenges. While, the over-all indicators appear positive, and the industry

believes that digitization of cable networks across India is likely to be largely

successful.

Some key issues that may lead to delays in implementation:

Timely installation of set-top-boxes

-- With rising demand,the lead time for the delivery of set-top-boxes (STBs),

currently 3 to 4 months, may increase going forward. Some other

countries including Brazil, Russia, and South Korea are also undergoing a

shift to digital television at the same time,leading to increased demand for

STBs, especially from Chinese suppliers who are amongst the largest

manufacturers of STBs.While manufacturing capacity does not appear to

be a significant constraint, operators who have not placed timely orders

for set-top-boxes are likely to see delays as the deadline approaches near.

-- To meet the stated deadline, a LCO operator in a metro city with an

average base of 1,500-2,000 subscribers may need to seed around 10 to 15

set-top- boxes every day. Most households would typically demand that

the installation, which takes about an hour, be done during a limited time

window of 6-8 PM on weekdays or during the weekends.This may lead to

delays in the installation process.The challenge is compounded by the fact

that many consumers do not appear to be adequately aware of the

digitization mandate and hence the need to install STBs on time.

-- Voluntary digitization is expected to be low before the sunset date

specified for a particular city. It is anticipated that local cable operators


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would continue with the existing analog system for as long as possible in

order to generate maximum possible revenue before the mandatory shift

to digitization.As cable operators start STB installation very close to the

actual deadline, it is unlikely that all existing analog cable TV homes will be

able to make a transition to digital cable within the specified time frame.

Availability of funding for smaller and regional MSOs

-- A shift to digitized regime will require large capital expenditure on digital

head-ends, back-end infrastructure, and STB installation. Regional and

smaller MSOs,which account for approximately 50 percent of the cable TV

market,may find it difficult to raise the required capital for Phase I in time.

-- The industry has also suffered a recent set-back with the government panel

rejecting the financial incentives proposed for the cable industry by

Information and Broadcasting ministry.While the panel has agreed on

increasing the FDI across platforms from 49 percent to 74 percent,

currently other fiscal incentives like providing custom concessions and

income tax holidays for service providers have been rejected.

Organizational preparedness

-- Apart from the financial requirements, digitization also presents large

organizational challenges for the MSOs. To be able to operate under

complete digitization and service its customers, MSOs will need to scale

up IT systems, build out call centers, and provide technical assistance to

LCOs.This would call for significant manpower preparedness.

Customer education

-- The average consumer today appears to be unaware of the digitization

timelines, and the potential impact of not complying with these deadlines.


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Accordingly, one of the critical success factors for a timely digitization

would be educating the consumer.Already there are number of campaigns

led by the government and supplemented by the broadcaster and MSOs

through their marketing initiatives.

Opportunities in Digitization

The biggest advantage is that the quality of content will improvise.Though the

number of pay channels might increase but to win the race they would improvise

in their content. There would be a high amount of pressure on free to air

channels to remain in the competition and maintain the viewership.

Due to improvisation in content the standard of viewership will also

improvise. Television will also attain the global standards. The reach will

become broader.

There would be an overall change in the revenue sharing among the stake

holders due to the transparency achieved.

There would be a drastic change in the viewership measurement and the

ratings of the channels.The ratings then would be more reliable and authentic

as there would be transparency in sampling and thus error margin will be low.

All this might help in increasing the FDI of the entertainment industry.As the

content and quality will be as per global standards, this will attract more

foreign investors.These investments will help generate revenue and thus will

build better infrastructure for future.

With the huge amount of investment required for the establishment of digital

television in the country, for the investors to get back invested money and


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earn profits, adequate regulation of pricing is to be done. Pricing should be done in such a way that

neither would it be a burden on the consumer,which

will prohibit them from subscribing and switching to digital TV not should it

put the investors and service providers in a state of loss.

Since the entire set up is to be changed for the new plan to be implemented,a

standardized technological frame work is to be set up.An adequate supply of

well priced and upgraded technology is required for the success of such a

futuristic project.A regulatory body needs to be set up to answer and rectify

the grievances of both the consumer and the service providers.

Regulatory issues to do with advertising, content, tariff, quality parameters,

readdressal mechanisms will become increasingly more critical.Government

and Self Regulatory bodies will need to play a more proactive role.

The government-mandated digitalization of cable TV in India will affect more

than 88 million households, and forever change the way revenue is split across

the pay-TV value chain.

The Television Networks (Regulation) Amendment Bill of 2011 enshrines in law

the Indian government's goal of moving all analogue broadcasting to digital

signals.The process will be implemented in a series of phases,but the bill's 'sunset

clause' stipulates the total switch-off of analogue signals by the end of 2014. By

that time,the 88 million households estimated to be receiving analogue cable-TV

services will have to be moved onto digital platforms.


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Govt. of India has passed an ordinance mandating the digitization of Cable Services? What does

this mean?

A ordinance has been passed by the Govt. of India on the mandatory digitization of the CableServices. According to this amendment made in the section 9 of the Cable Television Networks

(Regulation) Amendment Ordinance, 1995, the I&B ministry will make Digital Addressable

System mandatory. This measure will empower consumers to an increased number of channelsand high quality viewing.The concept of a prime band will be pass after introduction of digitization. Viewers will be able

to access digital services only through a set top box (STB). Eventually, you will be facing a

black out of analog signals in major metros like Mumbai, Delhi, Kolkata, and Chennai postOctober 31st 2012, in cities with more than one million populations like Pune, Ahmedabad and

Bangalore by March 31, 2013, the deadline for complete digitization in urban areas is September

30, 2014 while the entire country is expected to achieve digitization by December 31, 2014.

Every Household in India must have a Digital Set Top Box post these deadlines to be able to

watch Satellite TV.

The process of Digitization will definitely benefit the television viewers in India. Digitizationwill lead TV viewers to more qualitative viewing with access to digital picture and High

Definition Digital (HDD) Sound Quality. The real advantage for TV viewers will be when they

opt for a DTH Service provider like Videocon d2h.

TV viewing services in India is currently provided mainly by three mediums Analogue Cable

Services, Digital Cable Services and Digital DTH Services. Analogue cable services have beenexisting in India for more than two decades in India, however, analogue cable services have

limited number of channels and do not have extra features and value added services. Digital

DTH services in India have been started less than a decade back and are gaining popularity and

acceptance in India mainly because of their superior picture and sound quality.Everything you need to know about Digitization Do you still watch your television

programs on cable?

The cable operators transmit the channels in analog signal mode which is very hazy. Thecommon problems associated with the analog transmission include ghosting of images or even

hazy and noisy signal. You will notice that after a particular number, the quality of channels

become very poor.

In high end televisions, cable is more distorted and one will not be able to watch the programs

clearly. You need to switch over to the Digital signals provided by a DTH service provider to

reap the full benefits of a high end television and its superior features.

What is a Digital Signal? How are they superior then Analog signal?

In a digital signal, the receptivity is much clearer and all the channels have the same receptionquality. As both the signals are received at the same time, there are no issues with the

synchronization of sound with video.

Are Cable Operator ready to beam digital signals?

Cable operators are currently providing analog signals. There is a huge cost involved in

digitization of cable signals and many cable operators are shying away from this kind ofinvestment, barring few organized and large scale cable operators.

Why do you need to switch to DTH today?


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DTH means, Direct to Home Service. Through this service, the recipient will receive the signals

directly from the satellite on his Set Top Box. The viewer gets a wider range of channels to

choose from which can be activated through packages. The picture quality is much superior andthe sound is crystal clear. The viewers are also able to watch High Definition content which is set

to make television viewing even more superlative. HD Channels is one of the major advantages

for a DTH Service subscriber along with other features mentioned below. One can now watch hisfavorite sports action or travel & adventure series in high definition; he can now also see all themovie action with higher clarity. There is upto 5 times picture quality over normal or standard

definition picture quality and the images carry 16: 9 aspect ratios.

What does Digitisation of TV services mean?TV signals are currently distributed in the country in analog as well as in digital and terrestrial

formats. A digital format provides better picture quality & sound and other benefits leading to abetter quality service. Most cable operators in the country are providing analog TV

servicewhile allDTH operatorsare providing adigital TVservice. Digitisation means that all

cable TV households would receivedigital TVsignals through aSet Top Box. As partofDigitisation, every cable operator will be legally bound to transmit digital signals, which can

be received at the subscriber's home only through aSet Top Box, often called aSTB.

What is the Digitisation Bill passed by the Government of India? A bill aimed at digitising the cable industry by December 31, 2014 has been passed by the

Central government. This bill mandates that all cable TV operators will have to transmit TVsignals in an encrypted format through a digital addressable system. This will be done through

the installation ofSet Top Boxin every cable TV home.

Is there a deadline by when the Digitisation process has to be completed?As per the Digitisation bill passed by the government- Mumbai, Delhi, Kolkata & Chennai will

be fully digitised by 31 October 2012 as part of Phase 1. Remaining towns will be covered aspart of Phases 2 & 3 due to end on 31 December 2014.

What is the difference between Digitisation & CAS?Digitisation is the process of providing cable television signals in digital rather than analog

mode. This requires television signals to be routed through a digitalSet Top Boxto the

television.

The system used to control the distribution of digital television signals is called a Conditional

Access System or CAS. This ensures that only the signals chosen and paid for by a subscriber are

able to be received by that subscriber.

What are the benefits of Digitisation?
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It will provide a better TV viewing experience for consumers. They will enjoy better picture &

sound clarity, enhanced services such HD & Video on Demand (VOD), a range of Interactive

services and the freedom to choose from a bouquet of channels & pay only for those selected.

Post implementation of Digitisation, does everyone have to buy aSet Top Box?Post implementation ofDigitisation, aSet Top Boxwill be necessary to continue receivingsignals from the service provider of your choice (Cable operator/DTH operator). TheSet Top

Boxcan be either procured from your existing cable operator or you can upgrade to aDTH

operatorof your choice. If you don't buy aSet Top Boxbefore that you may not be able tocontinue watching cable television.

What if the cable operators do not provide aSet Top Box?Cable operators who do not provide aSet Top Boxmay no longer be able to continue their

service. All such cable TV homes may not be able to watch TV channels without aSet Top Box.

We are still many months away from the deadline. Why should I buy aSet Top

Boximmediately?Before 31 October 2012 in Mumbai, Delhi, Kolkata and Chennai you will have to buy aSet TopBoxto continue receiving cable orDTH signals on your TV. Considering there will be likely a

last minute rush which will result in hassle & complication ofSet Top Boxavailability, delay in

installation etc., it is a good idea to make the transition as early as possible. As buying aSet TopBoxis inevitable, it is advisable to upgrade now to aSet Top Boxand start enjoying thedigital

TVexperience. For example, you can start enjoying the India Australia cricket series, the

upcoming IPL cricket tournament or any of your favorite serials or movies in digital quality

rather than postponing it.

Can I also buy aSet Top Boxfrom my cable operator?While you have the choice of buying aSet Top Boxfrom yourcable operator, it is advisable to

evaluate all the options available in the market before buying anySet Top Box.

What should I look for when buying a Set Top BoxDigital cable vs DTH?A number of factors should be considered before deciding whichSet Top Boxto buy. Make sure

you do a thorough comparison betweenSet Top Boxprovided by Digital Cable and DTH. Fewpoints to keep in mind before making a decision:

1. Expertise inDigital TV- Does the service provider have adequate experience, infrastructure,technology and relevant expertise to offer a good qualitydigital TVservice. Do they have a track

record of providing high quality Set Top Boxes and a reliable service to many consumers?

2. Types of Set Top Boxes - Does the service provider give you only 1 type of Set Top or does hehave a range of different types of Set Top Boxes to meet your requirements ( such as a Standard

definition box , a High definition box and a High Definition Digital Video Recorder box )
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3. High Definition content - Does the service provider give you genuine HD channels?4. WarrantyDoes the service provider give a warranty on its Set Top Boxes?5. Interactive services - In addition to TV channels, will you be able to choose from a range of

interactive services for each member of the family?

6. High Definition(HD) service - Does the service provider give an HD service with the best ofHDchannels?

7. Convenience - Can you make your payments through a Helpline, mobile or on the Internet? Canyou buy recharge vouchers and are they easily available?

8. Video on Demand serviceDoes the service provider give you a Video on Demand servicewhich gives you access to a large library of movies, TV shows and concerts?

9. Channels of your choice - Will you have the option to choose your favorite channels / packages& only pay for those?

10.Customer Service - Does the service provider offer good quality customer service withprofessional installation, after sales support (with 24x7 call centers), guidance & counseling inservice enhancement?

Are there any problems in receiving a DTH service during rains?DTHis a very reliable TV service which has now been in existence for several years. Millions of

happy customers across the world have been watching television onDTH services. As TVsignals are transmitted from a satellite and received via a dish and antennae, it is possible that

sometimes there is interference due to rains. However such instances are really exceptions. In

case of Tata Sky, the TV signal availability annually has been in excess of 99% in most parts ofthe country. This provides for a highly reliable and almost interference free service and compares

very well with other services such as a mobile phone service. Moreover even a cable servicecanbe susceptible to loss of signal due to a number of reasons.

New Delhi: In December last year, the Lok Sabha passed a Bill to make digitisation of cable television

mandatory in India, starting with the top metros on or before June 30, 2012 and pan-India by 2014.

Households in the four metros - Delhi, Mumbai, Chennai, and Kolkata - will be the first to benefit from

this new rule. Here are the top 10 facts on what this could mean for TV viewers in India;

1. The Cable Television Networks (Regulation) Amendment Bill, 2011 mandates that all cable TVoperators will have to transmit TV signals in an encrypted format through a digital addressable system.

This will be done through the installation of a set top box in every cable TV home.

2. Consumers will now be able to enjoy better picture and sound quality, enhanced services such as high

definition and video on demand content.
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3. Viewers will be able to choose and pay for only those channels that they want rather than having to

pick from packages with fixed prices. The Bill will prevent Local Cable Operators (LCOs) from bypassing

the digital set-top box, and deciding the mix and price of channels according to locality and customer

base. The bill will also shift the balance of power away from LCOs to cable service providers and TV

broadcasters who will now be able to monitor their subscriber base and control the flow of revenues.

4. Digitisation, experts say, will increase the broadband penetration in India, and will do so at a much

lower cost. Analysts suggest a 10 per cent increase in broadband penetration will increase the GDP by

1.5 per cent.

5. Broadcasters will now be relieved from paying huge sums as carriage fee, thereby increasing

profitability and enabling them to focus on better content creation.

6. Subscription revenue will increase for the broadcaster and make them less dependent on advertising

and drive higher value creation.

7. Niche and specialist channels will now be able to launch and grow since the artificial shortage of

bandwidth created by cable operators will no longer hold true.

8. Transparency in the entire system will ensure accurate reporting of subscriber numbers and revenue,

thus creating higher value for the exchequer and preventing the fueling of the black economy. Currently,

broadcasters claim cable operators and distributors gain disproportionate revenues through under-

declaration of subscribers.

9. Higher growth in profitability for the broadcasters and Multiple System Operators (MSOs) will ensure

creation of higher value jobs and drive value in the industry.

10. Cable and broadcasting will become a more interesting option for private investment due to the

organisation and transparency. Advertisers too will now be able to create targeted campaigns due to

higher visibility into the viewership patterns of users.


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Case study

MUMBAI: According to data released by the Ministry of Information &

Broadcastingdigitisation to pick up by June, analysts (MIB) till May end, Mumbai based-Hathway Cable & Datacom led considerably in terms of preparedness for phase one of

digitisation of the Indian cable TV industry.

It had a digital penetration of 29% in Delhi, 58% in Mumbai and 28% in Kolkata. Among metro

towns, in Chennai and Kolkata, in particular, seeding of boxes has been delayed with penetration

of just 21% and 12.5%, respectively, said the data from the ministry.

A brokerage firm said in a recent report that it expects this data to have improved further in June.

We remain positive on digitisation over the long term and feel that it has positive ramifications in

terms of subscription revenues for publicly listed broadcasters like ZEE and Sun TV, and TVdistributors like Hathway and Dish TV, said Abneesh Roy and Alankar Garude of Edelweiss

Securities. The deadline for the digitisation of cable TV services in four metros - Delhi, Chennai,

Mumbai and Kolkata - was revised recently by the MIB. The implementation of the new Cable

Television Networks (Amendment) Rules was supposed to be done by June 30, 2012.

These amendments will ensure that MIB has greater power to take stringent punitive actionagainst MSOs (including revocation of the license of MSO) who provide errant information

about the on-ground progress of digitisation. Also, a strict watch will be kept on the digitisation

progress of MSOs; also, it will be obligatory for all MSOs to provide relevant information withina preset timeframe, the Edelweiss report said.

Cable TV digitalisation deadline put off byfour monthsThe much-trumpeted digitalisation of Cable TV services in four metros will now have to wait for

four months beyond July 1, when it was originally scheduled to be introduced.The decision to defer the plan for switchover from analogue to digitalised signals was announced

by the government today as it was found that the metros of Delhi, Mumbai, Chennai and Kolkata

were not ready for it."The Ministry of Information and Broadcasting has decided to modify the 30th June deadline for

a complete switch over to October 31, 2012," a statement issued by the I&B ministry today said.

"All the TRAI regulations for Digital Addressable System will come into effect from 1st

November, 2012," the statement added.It said that the assessment of ground realities, compelled the Ministry of I&B to set a new

deadline which would now be monitored more vigorously.

Digitalisation of the cable services in the entire country by December 2014 is one of theambitious tasks that the I&B ministry has set for itself and the first step towards achieving this

goal was its implementation in Delhi, Mumbai, Kolkata and Chennai by June 30.


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Installing Set Top Boxes (STBs) in each cable viewing household is a precondition for

Digitalisation and as per official sources even a fortnight before the June 30, it was estimated

that only 30 per cent of households had acquired STBs."The seeding of STBs in cable viewing households was not satisfactory so a new deadline has

been set. The state governments involved had sought an extension of six months till December

31. However we have agreed to a postponement of deadline till October 31 and this time we planto monitor it very strictly," a senior official told PTI.Upset with the fact that its July 30 deadline had not been followed, the ministry in its statement

today said that Multi System Operators (MSOs), Local Cable operators (LCOs) or other

stakeholders could face action if they don't match the new schedule."The Ministry of Information & Broadcasting will issue warning letters to those going slow on

their written commitments. Needless to add that both, the Ministry of I&B and TRAI, will take

action under the provisions of the Cable Act, wherever and whenever necessary," the statement

said.The ministry said that it is "imperative that the modified target deadline is set with strict

benchmarks to ensure that no complacency sets-in in the system and the new target date is

achieved collectively by all the stakeholders."Officials said that the I&B ministry had the power to suspend or revoke the registration of Local

cable operators (LCOs) or Multi System Operators (MSOs) if they violated one or more terms

and conditions of registration which were mandatory under Digitalisation.

"While the Ministry has agreed to postpone the date for four Metros, it also has the option oftaking penal action against stakeholders who do not take the required steps to Digitalise the cable

services in the coming days," a senior official said.

In its statement the I&B ministry also explained the compulsions that had forced it to set a newdate for Cable Digitalisation.

"Regulations on Tariff and Interconnection were issued by TRAI only on April 30, 2012 instead

of being issued in January, 2012, as expected.

The Quality of Service Regulations and the Consumer Complaint Redressal Regulations wereissued on May 14, 2012 by TRAI," the ministry said in its statement.

The I&B statement explained that as per regulations, every Broadcaster and MSO was required

to publish its Reference Interconnect Offers (RIOs) within 30 days of issue of the Regulation.Another 30 days are required for negotiations between Broadcasters and MSOs. Thereafter, the

MSOs and LCOs arrive at agreements which enable the consumers to have a clear indication of

the terms and conditions for installing Set Top Boxes and the prices of channels on an a-la-carteas well as on a bouquet basis.

The I&B statement said that another TRAI order had mandated that every MSO or its linked

Cable Operator has to put in place a Consumer Complaint Redressal System consisting of a

complaint centre with toll free consumer care number, web based complaint monitoring systemand other features.

"Both these orders of TRAI have not yet been ubstantially implemented. As a result of this, the

installation of Set Top Boxes has not picked up necessary pace for the completion of the process

of digitalisation by June 30, 2012," the ministry said.

digitalisation of cable tv (1)

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