Essel Group suspends satellite platform for cable

Written by Ashish Sinha | New Delhi | Updated: Mar 15 2010, 08:16am hrs
High entry fees, absence of favourable tariff plan and restrictions on the use of DTH infrastructure for Head end-in-the-Sky (HITS) operations have forced Subhash Chandras Essel Group, the first HITS operator, to suspend its operations. The company may soon surrender its bandwidth and transponder capacity to the government over mounting financial losses and an absence of level-playing field for HITS.

HITS is a new satellite-based cable distribution platform approved recently by the Cabinet to encourage digitalisation of 80 million analogue cable homes using the satellite. Riding on HITS, several large cable firms are hoping to attract foreign investors.

Exit of Essel Group from HITS may come as a big set back to I&B ministry, which has promoted HITS as a solution and a possible alternate to the controversial Conditional Access System (CAS) for bringing in transparency and digitalisation in the Rs 30,000 crore cable industry. While CAS could not go beyond the select areas of the three metrosDelhi, Mumbai and Kolkata, the I&B ministry has envisaged HITS to cover the entire country at one go as it uses the satellite for cable distribution.

According to company sources, Dish TV, the HITS licensee of Essel Group has initiated the process of surrendering its HITS bandwidth and transponder capacity to the government. It has also written to the ministry seeking an immediate fine tuning of the policy, failing which it will have to shutdown its HITS operations. We would like to mention that if the issues concerning HITS are not addressed immediately then we may not be able to sustain our HITS operations for long because of mounting lossesoperations may have to be shutdown, said Dish TV in its missive written to the I&B ministry recently. Technically, Dish TV, which is the DTH arm of Essel Group, also holds the HITS licence on behalf of WWIL, the cable arm of the group. The company says it has lost Rs 100 crore in the last few months itself to keep the HITS platform operational.

Dish TV says since it has held a valid HITS licence since 2003 and has managed to operationalise HITS before the policy guidelines were issued in November 2009, it should not be asked to shell out Rs 10 crore as entry fee for HITS. Also, it should be allowed to provide a its already existing technical infrastructure (of Dish TV) like transponder space and earth-station facilities for uplink and downlink of channels for HITS operations. The HITS policy, however, prevents an existing DTH operator to undertake HITS operations. Also, currently there is no separate tariff plans formulated for the HITS operators. In the absence of any tariff regime the broadcasters are either refusing to provide their content or asking for exorbitant amount for the same thereby rendering the entire HITS platform unviable, says a senior Dish TV executive.