There is a sudden change in the mood of the Industry. Signing of the Ordinance on Digitalization of Cable TV by the President on 25th October has put the industry on a fast track. This time the government wishes to introduce total digitalization which will include all FTA channels too. First phase of the process for all Metro cities is expected to be completed within six months of publication of Notification and rest of India will be digitized by December 2014. This is definitely a very ambitious target but if we think in an optimistic way, a good beginning has been made. Most of the advanced countries and even many developing countries have already finished their digitalization. The biggest advantage of the move is that it will help to boost up the convergence of telecom and broadcasting, increasing the broadband penetration, so much needed for a faster economic growth.
Success of the Ordinance largely depends on how it will be implemented on ground as many issues have to be sorted out by the regulator TRAI and the Ministry. Basic Tier pricing for consumers, pay channel tariff, a-la-carte distribution of channels, revenue share between stakeholders etc. need to be tackled as early as possible. Also, the government needs to educate the masses on digitalization and how will it affect their viewing as well as their purse.
My biggest fear is forcing an STB on the 40% subscribers of cable TV who come under the poor category, economically. Remember, the first experiment of CAS was made in the richest areas of Delhi, Mumbai and Kolkata and there too, the FTA channels did not need an STB to be viewed.
Hope the government plans to do something about this by giving subsidy to these people like the USA government, which doled out 40 USD for each poor household to buy an STB. In India, even the import has not been subsidized and there is almost nil indigenous manufacturing. If there is no help given, cable TV industry should be prepared to lose their connections en-mass, and broadcasters, their viewer ship.
Network up-gradation by the franchises will be another problem as heavy investment for the purpose may be beyond their financial limitation. They may be forced to sell off their networks to the MSOs and leave the industry forever.
Broadcasters and their distribution companies will be the biggest beneficiaries of this ordinance. It appears, the whole exercise has been done to help them make money even from the most unpopular channels and to cut down their expenses drastically on carriage fee.