One after the other, what we are being bombarded by is – ‘Technology’. And, one after the other, the Government is encouraging these technologies. Latest hype in the broadcasting world is about Headend-in-the-Sky (HITS) - a technology of broadcasting numerous channels from a single satellite system after aggregating them on ground from different satellites. On 17th October, 2007 Telecom Regulatory Authority of India recommended the Information and Broadcasting Ministry to implement HITS in India and also make an increase in the Foreign Direct Investment (FDI) limit for HITS from 49% to 74%. HITS would bring in digitalisation. Though, digitalization is advantageous to the subscribers in terms of quality, number of channels, more features etc., but the need of such technology by the masses at this moment is questionable.
An important point to be noted is that Digitalisation already exists in India through Direct-to-Home technology. Currently, there are three DTH providers in India namely - ‘DD Direct’, Dish TV and Tata Sky. However, three more players are coming up soon with their operations. The question that arises here is – what is the need of another back door entry to DTH market through HITS? It must also be remembered that the government, while permitting DTH, wanted to bring competition in the market against Cable TV, giving the masses a better option but the result so far is otherwise. DTH that covers 100% of the TV House-Holds (HH) (115 millions) has been able to garner only 3.5 million subscribers, a mere 3% in three years.
It seems that the Government which is willing to introduce HITS in an instant manner has forgotten that while introducing CAS, even after clearing the legislation in 2002, it took very cautious steps because it received the feedback that the consumers are not ready to spend money for the Set-Top-Box (STB). CAS was implemented only on the directions of the High Court and that too in selected regions of the three metros. It is not clear why the same government is planning to enforce STBs now in the whole country of 115 million house holds?
Another reason for deferring CAS was the non availability of STBs for the complete metro market. The confusion that lies here is that how the STB demand will now be met without any additional infrastructure in place. Hence, it is felt that HITS is not the right technology to be introduced in the market at this point of time. All cable networks can never be digitized in this manner in one go.
Before bringing HITS into the actual scene, the technology’s loopholes must also be carefully studied.
1. Though, the poor cable subscribers are unlikely to move to DTH (as it requires an STB) but even in HITS, the consumer needs to have an STB.
2. Cable operators who use HITS to receive Pay channels for further distribution, have no means to pick and choose these channels as required by their subscribers and thus pass on all the pay channels in a transponder (10-15 channels) to them. This will make the service more costly and unnecessary for the operators as well as the subscribers. The operators will also have to share their revenue with the HITS operator making their profits lower.
3. Although, the permission of HITS on Ku-band will bring in competition but this competition would lack a level playing field. HITS technology would make the existing DTH players want to acquire a HITS license adding another method of distribution and thus doubling their business. It will also help the existing large MSOs who also own broadcasting networks and TV channels to expand their ground networks all over the country, taking control of the Cable TV business of thousands of existing operators. Even telecom companies are eying for this lucrative market which has been developed by thousands of small cable operators over a period of 17 years.
4. HITS can be operated through two models. In the first model, the HITS operator works as an MSO but in the second model, the HITS operator only provides the up-linking infrastructure for any one to uplink and downlink the required channels. The first model can be implemented only if the whole country is declared as CAS notified, a move on which the Government is very slow.
5. TRAI’s recent recommendation states that no restrictions regarding transmission frequency band for HITS operation should be imposed. But, HITS operation on Ku-Band would eradicate the little difference between a DTH company and a Cable TV company or an MSO. And in such a case, a HITS license would enable a DTH company to use its existing infrastructure to carry out distribution of signals to individual households using MDU technology which is nothing but a cable network for Ku-Band. Similarly, since a small dish is required for receiving Ku-Band signals, an MSO with HITS license can also distribute signals direct to subscribers who can use a Ku-Band dish to receive the signals like any other DTH subscriber. If the above becomes a reality, why should the HITS operator use the cable networks of the existing Cable Operators? In order to protect the small businesses of lakhs of cable operators, non allowance of HITS operation on Ku Band is very necessary.
6. HITS technology, if permitted will even bring changes in the interconnection agreements between broadcasters, MSOs and Last Mile Operators as the revenue will have to be shared with the HITS operator too. Thus, the last mile operator will have to dish out more money to the MSO for the signals.
7. HITS is a new technology. And for a developing market like India, it is very difficult to accept new technologies at this point of time and that too in a sudden move, mainly because of economic reasons. HITS will help only the big media houses to expand their business and create monopolies. We have seen the example of CAS which we are not able to expand beyond selected posh areas of the Metros.
8. As soon as HITS is permitted, many big companies would enter into this business. And every big house, be it – an MSO, DTH or Telecom player wants to acquire/build their own last mile and do not want to help cable operators to improve the same. The cable operators are aware of this fact and want the government to give them security of their business. If encouraged by the government, the operators will not only upgrade their networks for digital services but even invest on digital head-ends to make more revenue.
9. Introduction of HITS in India does not sound good because of many more reasons. One of the reasons is that we have not yet regulated the Cable TV industry, either infrastructure-wise, or service-wise. Secondly, without the existence of addressability in the complete cable TV market, how can we handle over the entire market of 70 million households in to the hands of a few large companies allowing them to operate HITS? Thirdly, the companies that would offer HITS service would like to capture the market fastest, even if they have to force cable operators through Mafia or create new cable operators in an area where existing operator has gone with another HITS company or is unwilling to go with one.
10. Non Addressability is another big hurdle of the Television industry that has caused rampant disputes, uncertain revenues and investments are not coming. Out of the 71 million cable TV subscribers, 68 millions are not addressable. Trying to make them addressable overnight is not possible even if we use all possible technologies. We all know that it was very difficult for the Government to implement CAS. But, it was not the technology that was at fault but it is simply the people’s mindset which is not ready for addressability. Even after rolling out CAS in the four richest cities of India, the penetration of STBs was not satisfactory.
11. Permission of HITS would give further power to the already established big powers. The broadcasters who own a majority of channels and also distribution platforms like DTH, Cable MSO or IPTV will add another platform in their kitty and increase their profits further.
12. The government must also think that majority of India’s population lives in rural areas. It is cable TV which can grow faster than HITS in these areas as there will not be so many takers for the digital STBs there.
Conclusion Introduction of digitalization cannot be as sudden as the Government is perceiving. The regulator should find out means to bring in digital technology slowly and gradually and also change the mindset of the consumers. The thinking of the consumers can be changed only by the cable operators who can take the digital services to their subscribers and make regulations that apart from empowering them can also provide them cheaper services. To usher in digitalization following steps are recommended:
(a) Recognize all cable network infrastructure as telecom infrastructure.
(b) Encourage cable networks to consolidate and corporatise using as much fiber optic cables as possible. An optical node should not have more than 200 connections.
(c) Give incentive to large HFC networks in rural areas.
(d) Give incentives for two way networks.
(e) Encourage telecom companies, WiMax operators and large MSOs to provide triple play services through cable networks.
(f) The big companies who use cable TV infrastructure may be given incentives.
(g) Make a two way digital network mandatory condition for registration after a certain fixed period, like by end of 2010.
(h) More emphasis to be laid on digitalizing the existing cable networks rather than introduce more stake-holders to clutter up the already chaotic industry.
Cable TV system till date is the most dominant one in the market. This is because this service is perhaps the oldest and most user friendly one to which the people have become habitual. Though modern technologies like digitalization bring economic progress but all this cannot be done at the cost of the consumers. On the whole, it must be realized that Cable TV is a people’s technology. This claim stands value because DTH in 3 years could capture just 3.5 million subscribers but Cable TV added in its ambit 10 million more Cable TV households in these years. Also, it is only the Cable TV industry that has made huge success in terms of number of subscribers despite being unorganized, unregulated and badly operated.