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 Cable TV set for major transformation soon

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PostSubject: Cable TV set for major transformation soon   28/08/08, 01:20 pm

Cable TV in India is set to go through a major transformation and consolidation over the next few years as a result of recommendations that the Telecom Regulatory Authority of India (TRAI) has submitted to the Ministry of Information and Broadcasting a month ago.

TRAI has recommended that by 2012 every cable network operator should stream digital quality video to every home. Whereas TRAI had earlier restricted the scope of digitised transmission of video to the top 55 cities in India, it has now extended this to all of India, to include rural areas as well.

"Digitisation of video implies stopping analog transmission altogether, including free-to-air channels. With this requirement for digitisation, the cable TV industry will go through a consolidation process where the fragmented, unorganised cable TV operators will have to tie-up with triple play service providers to form corporatised entities of a meaningful size" said AK Sekhar, CTO, You Telecom India Pvt Ltd.

"This means, through one connection, cable TV customers can now access broadband, make voice calls through Internet (VoIP) and watch videos (digital cable TV) in their residences or in their offices, making triple play services more accessible to all," added Sekhar.

According to Media Partners Asia, cable TV penetration in India will go up from 62 per cent in 2007 to 65.4 per cent in 2010 and revenue will shoot up from $ 5.1billion in 2007 to $ 7.7 billion in 2010.

Although the cable TV industry has seen exponential growth in the past two decades and will continue to grow, cable TV transmission is predominantly analog and limited to provisioning of TV channels only. Upgrading to digital transmission will involve huge investments in technology and therefore cable TV operators are likely to find it tough to face operators employing advanced distribution technologies such as direct-to-home (DTH), headend-in-the-sky (HITS), and Internet Protocol TV (IPTV) on their own.

Cable TV operators will be compelled to tie up with triple play service providers such as Hathway, Digital Entertainment Network, You Telecom, Asia Net and others.

"The country will begin to see major consolidation and upgradation of the last mile connectivity by cable TV operators to enable two-way digital TV interactivity which will be provided by triple play service providers like ourselves," said Anuj Gandhi, CEO, Digital Entertainment Network.

Gandhi said currently while most cable TV operators are offering dual services -channel transmissions and internet services, the next six months would see the rollout of various online value-added services like 'pay-per-view,' 'red button initiatives' and 'video on demand.' However, "It will take a few more years for VoIP (Voice over Internet Protocol) to become a reality," he added.

TRAI has made a provision for existing registered cable operators to digitise their transmission over five years, whereas new entrants have been allowed only three years to effect the transformation.

"The cable TV Industry will now come under a proper licensing mechanism similar to the telecom licensing policy, wherein city, state or national licences can be bought. These networks have the potential to ultimately provide converged services similar to the telecom networks. Many companies in the US and other developed countries have started providing voice and internet services on these networks and are competing directly with the telecom companies, presenting an attractive business model for cable TV operators," said Sekhar.

TRAI has kept in mind that existing cable TV operators do not have access to huge new funds, having already invested considerably in their networks. The recommendations presented to the Ministry of Information and Broadcasting by TRAI are a step forward in restructuring cable TV networks to ensure effective licencing compliance, attract investment, facilitate new value-added services and encourage digitisation.

So, how will the wholesale switch from analog to digital, with 300 plus channels to choose from, change the TV viewing habits of digital cable TV consumers? Studies done on those who switched from analog cable TV to DTH subscriptions may be instructive on what to expect.

According to one survey, conducted by TAM Media Research, the switch to DTH services provided viewers 43 channels more than cable TV services. But viewers continue to watch the same channels as they did before.

What's surprising, however, is that the survey found that penetration of digital services in rural areas is four times higher than in the urban areas of the country, thanks mainly to Doordarshan's DD Direct Plus, which is possibly the only free DTH service available.

Meanwhile, triple play service providers have been beefing up their plans in anticipation of an explosion of digital TV in India.

Hathway entered into a strategic alliance with the Star network as early as in 2000 to provide digital interactive TV and broadband internet on their TV sets. While the CEOs of Hathway and Asianet declined to reveal their investment commitments, You Telecom has committed Rs 120 crore towards its digital cable business expansion and plans to offer value-added services such as Internet telephony, online education services for school and college students, and online gaming.

Digital Entertainment Network is committed to providing world-class pay-television features and services to Indian cable TV subscribers through a tie-up with NDS, which provides Video Guard conditional access, Media Highway middle ware and customised electronic programme guide, said DEN's Gandhi. He declined to mention the extent of the company's investment.

So, couch potatoes of the country, lie down on the sofa and enjoy doing everything - from watching movies to surfing the Internet to even shopping and banking online, on your big fat flat screen TVs.

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