NDS Technology Solutions, based in Middlesex, UK, is held jointly by global private equity Permira funds and Rupert Murdoch?s News Corporation. The company enables pay-TV operators to deliver digital content to TV set-top boxes, digital video recorders(DVRs), PCs and mobiles. Jayant Changrani, country head and general manager of digital pay TV solutions provider, NDS Technology Solutions, speaks to S Saroj Kumar of FE on the impact of the government?s recent proposal to digitise cable television on the industry.
There is a 5% custom duty waiver on set-top boxes (STBs) and digital head-end equipment till 2014 wherein 135 million homes with analogue connections will have to be digitised. This will create a fresh demand for 75 million set top boxes. How is the industry gearing up to meet it?
The government?s decision to switch off analogue TV and aggressively digitise by March 2015 has unlocked a huge potential in the Indian Cable TV market. This also means a huge market demand for hardware and software solutions that can help operators quickly digitise their networks with cost effective and scalable solutions. The ball is clearly in the cable operator’s court because a lot depends on planning, provisioning, purchasing, distribution and installation capabilities. We also see the need for consolidation in the cable TV industry as this will help operators achieve economies of scale in terms of procurement and supply chain management of STBs.
Currently, analogue cable has a bandwidth limitation on delivery up to 80 channels. Post-digitisation, how many channels could be delivered via digital mode?
Analogue cable operators are not able to offer channel capacity to a lot many content providers who want to distribute channels in India. Digital cable operators currently have the capability to offer up to 200 channels in a mixed digital and analogue environment. After full digitisation, and assuming no upgrade of the last mile network, a cable network with a capacity of 80 analogue channels should be capable of carrying around 400 or more digital channels.
How are MSOs going to cough up an estimated R15,000 crore for digital infrastructure as per the direction of I&B ministry ?
We have observed the trend, which has already started with several MSOs undertaking partial IPOs to raise the investment required and we believe that the trend will continue.
Companies going for IPOs are required to have a high level of transparency and this will benefit the industry as a whole.
Digitisation of cable TV is expected to spike end-customer subscription cost and analysts predict outbreak of tariff war between digital cable and DTH. As you see it, how would these two trends pan out?
We do not necessarily see a price war breaking out. With DTH and STB prices comparable, one-way digital cable operators will be able to offer more channels. So, digital cable operators will have to compete on more than just price and will need more than just low ARPUs to survive. All operators will also have to compete on the quality of the viewer experience offered and on customer service. Cable operators who make the investment to offer a two-way service will be able to offer broadband and converged services. This is a huge opportunity to roll out broadband, as the penetration of broadband internet in India is very low. In addition, many of the existing broadband connections do not provide sufficient stable data rates to support IPTV of a quality that can compete with DTH and digital cable.