InCablenet dumps pricey Intel set top boxes, to wait for policy

Sibabrata Das in Mumbai

Hinduja-promoted InCablenet has shelved its plans to introduce Intel’s set-top boxes because of its high price. Each box would have cost Rs 35,000, a price which customers would be reluctant to pay.

The set top boxes were to be launched in June, 2001. But no breakthrough in pricing and technology could be made. Besides, the company felt the market was yet to evolve. Mr Dileep Gupte, who was moved from cable distribution business to the set top box division, was eased out last year, sources said.

The company will wait till the government’s policy on conditional access is spelt out and may go in for cheaper boxes, said Hinduja TMT vice chairman Solomon Raj. “If conditional access is made compulsory to the subscribers of cable network, the market will require huge number of boxes. We will have to go for a low pricing,” he said. Though Mr Raj said Intel was still working on the boxes and its pricing, sources confirmed that the company had taken a decision that Rs 35,000 would be too high for the market to absorb.

Price Waterhouse, which was hired by the company to do a market survey, has recommended that the price now quoted for the premium-end box with all the Internet and digital features would be on the higher side. It said IndusInd Media & Communications should not rush into a decision on such high-end boxes and negotiate for a box which would be acceptable to customers.

The mass market for the set top boxes would be in the price range varying between Rs 3,000-5,000. This will be only for viewing the satellite channels and not have Internet facilities, said Mr Raj.

The mid-segment box will be around Rs 7,000 and have limited Internet facilities. The high-end box providing all the digital and Internet facilities will be between Rs 10,000-15,000. This will have interactive and streaming video. “We are yet to finalise anything. We are still weighing our options and trying to figure out how to bring down the price. If conditional access is made compulsory, prices will further fall,” Mr Raj said.

IndusInd Media & Communications has already utilised around Rs 110 crore of the Rs 219 crore Intel paid to acquire nearly 4 per cent stake in the Hinduja company.

The amount will be equally split between expansion and upgradation of the network. The company plans to expand its cable network into 13 cities, taking its total presence to 25 cities. “We will also invest in upgradation of the network and make it ready for set top boxes,” said Mr Raj.