Listed cable distributors like DEN Network, Hathway Cable, Dish TV, WWIL and dozens of other private cable firms await tax breaks as they are likely to be recognised as infrastructure companies in Budget 2012-13. This has been a long-standing demand of the industry that houses over 60,000 cable operators and two dozen multi-service operators, serving over 100 million-plus cable homes and reaching over 500 million consumers.

The proposal for fiscal incentives, including benefits under Section 80 I(A), is being evaluated by a committee of secretaries, an official source connected with the process told FE. The committee is expected to meet next week and an early decision is expected. It is the finance ministry which takes the final call on tax set-offs; however, since revenue secretary RS Gujral is a member of the committee, it would be the logical conclusion if the panel decides so.

?Infrastructure status is essential for digitisation. We hope the decision comes sooner than later so the benefits can be availed of in the first phase itself,? A Mohan of Indian Broadcasting Foundation (IBF) and a member of the task force on digitisation told FE.

Besides income tax exemptions, an industry with infrastructure status gets easier access to overseas funds and get easy credit from domestic banks. ?This will be of great help to the large number of big and small cable distributors who otherwise find it difficult to raise money,? said an analyst tracking the sector. It will also encourage more private companies to get listed.

According to experts, digitisation will usher in higher-quality channels and value-added services, besides rising subscription revenues for operators and reducing carriage fee for broadcasters.

For India, the switchover is significant as developed markets including the US and Japan are progressively terminating analog transmissions. In India too, it will be mandatory to shift from analog distribution (via copper wire cables) to digital regime (set top box and optic fibers) by end-2014. To facilitate the shift, measures like grant of infrastructure status, tax breaks for imported set-top boxes, hike in FDI limit to 74% in digital cable services and other fiscal measures have been on the industry wish list for quite some time.

All cable homes must switch to digital addressable systems within the next 36-months in four phases ? starting with Delhi, Mumbai, Kolkata and Chennai by July 1, 2012. The government feels at least one crore set top boxes will be required in metros alone in the first phase.

Experts say that for metros, the cost of digitisation will cross Rs 1,000 crore. According to early estimates, nationwide digitisation will require around Rs 25,000 crore.

Customs duty exemption for set-top boxes ? which will be mandatory under the directive from the information and broadcasting ministry under Ambika Soni ? are also on cards. The ministry has earmarked Rs 50 crore of Plan expenditure for a mass-media campaign to educate consumers about the switchover across three years. Broadcasters and cable associations too will contribute a similar amount, sources said. The first part of the campaign is expected to go on air early next week.

The I&B ministry has created six sub-groups within the task force to facilitate a smooth transition.