ITV

Tag: set-top-boxes

  • “The country cannot afford to have tens of millions of bad STBs deployed”

    “The country cannot afford to have tens of millions of bad STBs deployed”

    For a company that was founded just about 23 years ago, Broadcom Corp has indeed come a long way. Founded by a student-professor combo, it is expected to announce financial toplines in excess of $8.5 billion this year. But more than that it is a market leader in providing chips for technologies such as enterprise networking, set-top boxes, and mobile connectivity functions.

     

    Earlier this year Broadcom president & CEO Scott McGregor had announced that both China and India are critical markets for the company at a conference in Shanghai. He had highlighted that Broadcom’s investments in research and development in India are probably the highest outside of the US. 

    Broadcom executive vice-president & general manager of broadband communications group Daniel Marotta had stated at the same conference that the company sees huge opportunities in the digitisation of the Indian cable TV business and that it had developed a special chip for the market as the ARPUs in the country are low. 

     

    Indiantelevision.com’s Sandhya Sutodia got in touch with Broadcom India managing director Rajiv Kapur to get further insights into how he views the progress of India’s government mandated digitisation and the opportunities available to his firm.

     

    Excerpts:

     

    What is the current state of digitisation in the country and Broadcom’s role in it?

     

    Digitisation has just about begun with phase III and IV still ahead of us. The new government seems to be putting its focus on various forward looking initiatives. We expect digitisation to continue with a high momentum.

     

    As Broadcom, we have prepared a variety of STB platforms providing a range of solutions for operators to offer to their subscribers. These range from the very basic cost sensitive SD zappers to entry HD platforms to higher end PVR and server class solutions. We offer several unique market differentiating features in each of these platforms, allowing subscribers and operators to enjoy the best of digital TV.

     

    Broadcom also invests heavily in hybrid solutions enhancing live TV with interactivity and over the top content and applications. Our lowest end SD solution offers USB and Ethernet interfaces at market competitive prices.

     

    We have a host of suppliers ready with STBs designed, both in the country and abroad, ready to ship as operators place future orders for the next wave of digitisation they are preparing for.

     

    How do you see the growth in the next two years?

     

    We expect the high growth in STB sales to continue beyond the digitisation deadlines. First reason is that subscribers may stagger their purchases of STBs for their second and third TVs in some homes.  Then, continued sales of TVs drives a healthy demand for more STBs in a market where TVs are always recycled to another room or home. Third, and most importantly, operators will continue to catch up with additional technologies and applications we invent on a continuous basis to drive improved user experiences and in turn higher retention and ARPUs for themselves.

     

    How are the dynamics of the business changing since the past couple of years in the Indian market?

     

    One visible change is a rising interest in local design and manufacturing. We are finally seeing supplies for the national optical fiber network (NOFN) which demanded a large percentage of made in India products. Small entrepreneurs are stepping up to design and manufacture electronics products locally. Operators are showing more acceptance of locally manufactured products.

     

    What are Broadcom’s recent innovations and solutions for the cable industry?

     

    We have implemented an almost complete turnkey solution for the low end cable TV market which includes a ready hardware and software stack to go along. This is so optimised that the memory footprint is very small, thus reducing costs. Additionally, market differentiating features like fast channel change have been added to enhance the user experiences in a digital world.

     

    We also invested in a range of STB solutions that have a unique technology that allows operators to manage their networks with high quality of service. The end-users benefit with better video and service at lower costs and faster response times.

     

    We have also invented new architectures for broadband on coax that are designed for deep finer, low density networks. This lowers costs of installation for operators so more customers can enjoy high speed broadband despite lack of subscriber density.

     

    Please share some of the latest developments at Broadcom for the STB space?

     

    We keep innovating on market differentiating features. With a large R&D team in India, we take advantage of the local resources to invent new features for the country. We named a few above. There are many others. For example, we automatically can adjust the volume of programs to levelize them across ads or channels. Or we can automatically reformat video received on live TV for viewing on a mobile screen in the same room or for take away. Many more examples exist.

     

    What concerns you about digitisation in India over the recent past?

     

    Rapid paced digitisation is always risky. Additionally, quality of hardware and services are critical, not just for now but for a long life of hardware ahead. I am particularly concerned about some of the suppliers that are shipping into India.

     

    For example, most STBs in India face a high risk of lightning or surge burn out. Operators have been experiencing this. We strongly recommend all STBs imported into the country be specified to meet a high protection standard to reduce risks and damage commonly seen here.

     

    Additionally, the harsh conditions in India make it important that performance of each STB is predictable and consistent for years to come despite physical damage, moisture etc. Legacy CAN tuners in TVs are known to have a varying performance from STB to STB, and over the years.

     

    The country cannot afford to have tens of millions of bad quality STBs deployed. We cannot waste energy and resources to replace STBs in a few years. The quality of every STB is critical.

  • DEN Networks selects STMicroelectronics for STBs

    DEN Networks selects STMicroelectronics for STBs

    MUMBAI: Enhancing its set top boxes (STBs) and gateways for its six million subscribers, DEN Networks has tied up with STMicroelectronics (ST), the global semiconductor manufacturer and supplier of system on chip (SoC) ICs.

     

    Using this technology in DEN’s new HD zapper boxes, it is looking at growing its customer base and revenues as well. The STiH273 (Palma) integrates a field-proven and widely deployed digital video broadcast-cable (DVB-C) demodulator that has been optimised to work with high-performance external controller area networks (CANs) and silicon tuners to meet the stringent RF-performance requirements of the Indian cable networks.

     

    The STiH273 (Palma) also delivers high-quality Faroudja video, 3DTV support, connectivity, and advanced security schemes with all the latest conditional access system (CAS) support, including NSK2.

     

    Manufactured in 40nm process technology, the chipset supports an enhanced processing engine with integrated on-chip features that simplify set-top box design, enable operators to take advantage of lower-cost memories, and minimize system power consumption.

     

    “Our new high-definition digital set-top boxes leverage STMicroelectronics’ feature-packed and flexible SoC ICs, providing an ideal platform for us to deliver innovative value-added services to our customers,” said DEN Networks COO MG Azhar.

     

    He further added: “The STiH273 SoC is clearly the right choice for our latest generation of set top boxes with the right power, versatility, and features to meet our market needs. We are confident that the chipset will help us in creating both enhanced customer satisfaction and sustaining our leadership edge in India.”

     

    “As a leading Cable MSO in India, DEN Networks sets the trend for technology, modernisation, and radical transformation, and ST is proud to contribute to DEN’s strategic intent. DEN Networks’ selection of ST’s technology underlines our core competencies and reiterates our commitment to this fast-growing market through localization and cooperation with our India partners,” said STMicroelectronics regional vice president for greater China and south Asia region and director for India Design Center Vivek Sharma.

  • By imposing digitisation, government is giving away the market to DTH: BP Rath

    By imposing digitisation, government is giving away the market to DTH: BP Rath

    When he is not actively focused on growing the business of the company, he is a family man.  He spent eight years at his current group’s parent company– Indian Metals and Ferro Alloys and then driving the group’s venture into cable and television in 1998. Currently the president and CEO of Ortel Communications, Bibhu Prasad Rath has ensured that the company not just grows, but becomes one of the big players in the country.

     

    From finance to marketing and then to the cable business, he has seen it all for the company headed by Jay Panda and Jagi Mangat Panda. By taking a cue from the US cable TV  biz, he and his team at Ortel looked at consolidating the fragmented mom-and-pop Indian cable TV industry.

     

    Rath took out some time to talk to indiantelevision.com’s Vishaka Chakrapani about Ortel’s future business plans, rollout of digitisation and the key areas of growth and development in the coming few years. Excerpts:

     

    What is the philosophy at Ortel?

     

    The core philosophy of Ortel is to have access to the consumers’ homes. We want to be a communication pipe to consumers’ homes which is capable of delivering a wide range of related services in future. To achieve this we decided right from the beginning that we would have last mile ownership, because in cable TV, video services are one way, and data is two way. Two way services are extremely sensitive to network parameters.

     

    In the traditional B2B model where the MSO reaches out to the LCO and then to the consumer, close to 80 per cent of the work is done by the LCO. The MSO does very little and so there is no quality uniformity and many times the LCO lacks the right equipment. Workmanship matters a lot in any communication network. It is a choice that we made from the beginning that we wouldn’t deal with any LCOs. Our business is B2C.

     

    Many people tell us that our model is unique. We, at Ortel, follow the international model by having a network that is capable of delivering both the services- cable and data.

     

    The biggest advantage of this model is that we can build a network and also provide data services.  The disadvantage is that because you are doing last mile, it is capex heavy. So you can’t do the kind of large spread operation that an MSO-LCO model can do.

     

    What is your reach?

     

    We are now operating in four states- Odisha, Chattisgarh, West Bengal and Andhra Pradesh. On an overall basis we have a network capacity of 800,000 homes but the subscriber base is 520,000 of which 80 per cent is concentrated in Odisha and the rest in the other states.

     

    We want to expand a lot more in other states but we haven’t been able to raise money. We look forward to raising capital in the next one year. Then our focus will be to expand in our existing and other neighbouring states such as Madhya Pradesh. Our focus is also to expand geographically to other states and more in Chattisgarh and Andhra Pradesh. Our idea is to build a regional last mile play. We do not intend to go national now.

     

    What is the status of your IPO?

     

    Right now, though the markets are improving and we hope that they continue to do so for next three to four years, we are not actively looking at it. We are looking at other means of fund raising such as private equity as well as international strategic options. The likelihood of opting for private equity is definitely higher.

     

    What has been your progress in digitisation?

     

    We have been digitising for nearly five years now, much before the mandate came in. We don’t have an under-declaration issue. We have to digitise because it enhances the capacity by getting more number of channels so that we can effectively compete with DTH operators.

     

    Odisha comes mostly in phase III and IV. Kolkata came in phase I and Vishakhapatnam (Vizag) in phase II. Our digital base is 15 per cent of our total subscribers. Analogue has always been a fixed price model. In every city you have different sections of consumers with different needs for content and different paying abilities. In digital you can offer customised products to customers. Digital is an important tool to tier the service. There are four markets in Odisha where we have been digitising- Bhubaneswar, Cuttack, Rourkela and Jharsuguda, apart from Kolkata and Raipur.

     

    Which are your key investment areas for digitisation?

     

    We are doing three kinds of investments. One is backend. We have five headends in Bhubaneswar, Jharsuguda, Rourkela, Kolkata and Raipur. We don’t intend to set up any more headends. What we are looking at now is intercity connect through infrastructure providers (IPs), mainly RailTel. Wherever we do digital we will take the feed from Bhubaneswar. At present, we give the feed to Vizag through RailTel.

     

    The next area for investment is the network. We have a fully digital network which is broadband ready so that isn’t an issue.

     

    The third cost is the set top boxes (STB). Currently we get a STB for Rs 1700. The box vendor asks for only half the amount and we pay the rest in installments, while we charge consumer only Rs 500 per box. We are looking at raising money for geographical expansion.

     

    What is your current ARPU?

     

    Our analogue ARPU is Rs 150 plus taxes, digital is about Rs 185 plus taxes and broadband is about Rs 375 plus taxes.

     

    Then we also get 15 per cent to 20 per cent incremental customers.

     

    How digitisation ready are you?

     

    In our case, SMS, encryption, billing, tiering and CAF for every digital customer and encryption, billing, and CAF for analogue customers is already in place since the past 15 years. We have a billing database where every customer’s data is entered. A collection team of nearly 700 people on contract basis go to all the neighbourhoods at the beginning of the month and collect money by providing a bill and receipt. We have a call centre where customers can lodge complaints and the locally situated service centres take care of their complaints. So the entire B2C backend is already in place.

     

    Our main challenge now is to seed the STBs. It isn’t possible to complete that by 31 December at the pace at which it’s happening right now. Our current focus is not on spread but on depth. Our biggest market is Bhubaneswar which is already 65 per cent digital. By 31 December about half of our entire subscribers should be digital.

     

    What do you have to say about TRAI’s digitisation mandate?

     

    We don’t believe digitisation is mandatory, it needs to be voluntary. When you go to smaller markets, digitisation becomes unviable. The main issue is how do you take the signal to homes? It’s either by setting up a headend or RailTel.

     

    In smaller markets the number of people is less, so the cost per person increases and becomes unviable. We have spoken to regulators that going forward, smaller markets are going to be difficult and by imposing digitisation, they are giving away the market to DTH which isn’t fair to the cable industry.

     

    We also intend to explain this to the government. They need to do a further cut off for phase III and IV, say half or quarter million population. Below these population numbers, we require either an exemption from mandatory digitisation or even longer time until the market situation stabilises and costs come down and people start getting returns to invest for digitising the less populated areas.

     

    What is your subscriber churn?

     

    We are facing around 1 per cent churn every month but on net basis it is positive. Churn happens because people shift their house to another city or maybe in the same city, some due to timings such as exam time, and I’m sure some due to bad service. On an average we also get around 500 DTH converts per month.

     

    What is the status of your broadband offering and what are your plans for the same?

     

    Broadband has been a key focus area at least at a mental level. 10 years ago, TV was the only thing in life. Now people are slowly moving to browsing and watching videos on smartphones. The TV set as a device at home is going to see a reduced utility over a period of time and internet is going to be used more. Ultimately we see this business as a broadband business and not just as a TV business. Whether this will happen in 10 or 20 years, I don’t know but it’s going to be business of broadband, not so much of analogue or digital.

     

    Out of our entire network capacity, we can give broadband to 400,000 homes. But our actual subscriber base for broadband is 11 per cent of total TV subscribers, that’s about 55,000. This 11 per cent gives 20 per cent to 22 per cent of overall revenue.

     

    Our focus is to increase broadband penetration from 11 per cent to 25 per cent.

     

    What broadband services do you offer?

     

    We are currently operating on DOCSIS 2.0. The same cable that goes to a consumer’s house is split inside for TV and for PC. We also have wired and wireless modem services for using many devices. In retail we provide speeds ranging from 512 kbps to 2 mpbs.

     

    What is your main focus now for Ortel Communications?

     

    Our main focus for the next few years will be digital and broadband. Any other service rides on broadband or digital. The only other service we have been trying to get in the past also, but it isn’t working out due to regulatory issue, is the voice service.

     

    Our aim is to go from the current subscriber base to 30,00,000 in the next three to five years.

     

    How has your growth come? Organically or through LCO acquisitions?

     

    We have acquired about 1000 LCOs since 2008. Half of our growth is organic and half is inorganic.

     

    Initially our growth was only organic and in competition with LCOs. Subsequently, since 2008, we switched to the LCO acquisition model. We acquire the LCO, dismantle the network and lay our own network.

     

    The LCO exits the business with a revenue share. We buy out the LCO with a structured payment where part of money is paid at the time of buying and the rest is given over a longer period of time ranging from 5 to 7 years. So the LCO owner gets more than what was originally committed because he gets a revenue share. The LCO’s owner does not go back and start competing with us.

     

    The key difference is that in the organic model when you are competing, you need a longer time to reach critical mass. If you are acquiring then it happens right at time of acquisition. Depending upon what works best for a situation, we follow either model.

     

    How has your revenue grown?

     

    Last year our revenue was Rs 132 crore, while this year we expect it to reach Rs 155 crore. The EBIDTA margins are usually 32 per cent to 33 per cent.

  • Technicolor announces 4K Set Top Box deal with Tata Sky

    Technicolor announces 4K Set Top Box deal with Tata Sky

    Paris (France) May 14, 2014 – Technicolor (Euronext Paris: TCH; OTCQX: TCLRY) announces an agreement with Tata Sky, India’s leading direct to home (DTH) service provider and HD market leader, to provide 4K Set Top Boxes in volume early 2015. The Technicolor product is the first 4K Set Top Box to be shipped in volume and underscores Technicolor’s leadership in delivering content with the highest image quality.

     

    This agreement is the result of a long, strategic relationship with Tata Sky dating back to 2005, and a Technicolor 4K roadmap of solid technical innovation including 4K trials that have gone on around the globe. Technicolor is gearing up to deliver the most immersive 4K experience on the market. Technicolor is building on its compression and color science to deliver an augmented content experience capable of delivering Hollywood-grade picture quality to viewers.

     

    “Technicolor once again leads the market in landing the first high-volume deal to deliver 4K Set Top Boxes to consumers. This deal further solidifies our leadership in the 4K marketplace,” said Michel Rahier, President Connected Home. “With the promise of an unparalleled immersive viewing experience and the predicted rapid growth of the 4K market, this agreement is a valuable strategic business opportunity for Technicolor and our long term partner, Tata Sky.”

     

    “4K is an important milestone in Tata Sky’s product portfolio and we are confident of the timing and quality of delivery because of our partnership with Technicolor” said Harit Nagpal, CEO Tata-Sky.

  • Digitisation at one-third of the investments by MSOs, claims JAINHITS

    Digitisation at one-third of the investments by MSOs, claims JAINHITS

    NEW DELHI: A campaign “Cable ka Shahenshah, DTH ka Baap” has been launched by JAINHITS, India’s only HITS based Direct to Network (DTN) service, relating to quality of services and its ability to deliver digitised content across terrains, anywhere in India.

     

    JAINHITS technology in partnership with Motorola (now ARRIS) and IntelSat offers a unique proposition to the LCOs (local cable operators) of an overnight plug and play digitisation solution that comes for an investment as low as Rs 4.99 lakh only. This makes them fulfill Telecom Regulatory Authority of India’s (TRAI) guideline requirements of All India digitisation by 31 December 2014.

     

    The HITS platform claims that if the 6,000 odd MSOs were to digitise their networks, they would require an investment of up to Rs 3 crores per MSO, thereby costing approximately Rs 18,000 crores as mere investments. JAINHITS on the other hand can provide direct services to over 60,000 LCOs spread across India with average investment of only Rs. 10 lakh per operator, thereby digitising the country for just Rs 6,000 crore, which is one-third of the investment required by MSOs. Thus, the massive saving of Rs. 12,000 crore is being passed on to the customers by providing cheaper services with enhanced quality viewing.

     

    Moreover, JAINHITS “Go Digital” entry scheme strategy will help LCOs to increase their subscriber base manifold in a short span of time. Not only this, through this partnership model LCO will witness significant increase in their customers ARPUs which are likely to double in 2014-15 with broadband and other VAS product/service roll outs. All this put together will help JAINHITS LCO partners enhance their business and earnings.

     

    With a mere investment of Rs 4.99 Lakh, an LCO will get all the necessary help in terms of technology, content and Set Top Boxes that will enable them to operate independently. JAINHITS offers LCO’s new product/ service roadmaps to address the ever- evolving market and customer needs along with the full technology solution roadmap for cable TV network upgradation. In addition, LCO’s also receive all necessary training on technical, legal, product, consumer satisfaction, compliance aspects etc. which facilitates them to offer standardised services.

     

    JAINHITS is the only platform in the country, offering complete empowerment and ownership to even the smallest LCO by making him a Leader and Cable Owner and an ISO (Independent Service Operator).

     

    JAINHITS national sales head Jeet Narayan Singh said, “In our endeavor to enable 60,000 small and medium operators to become MSOs and go digital independently, we are offering end to end single window solutions. JAINHITS offerings are fully DAS compliant with wider choice of channels that are cost effective and fastest way to offer Digital Cable services in any part of India. Our Broadband offering gives additional edge to ISOs and helps them to increase their revenues.”

     

    Through this engagement, JAINHITS provides subscriber management system (SMS), which empowers LCOs to manage his own customer base and offer, customized packs to its subscribers. In addition to this, JAINHITS LCO will be able to manage billing and create his own subscriber records as required by regulators. The SMS also provides an inventory management system and MIS system which enables the LCO to operate his business, generate reports and manage taxation etc.

  • Star Sports, Hathway lock horns

    Star Sports, Hathway lock horns

    MUMBAI:  Two hard-to-miss campaigns have been doing the rounds of television, radio and digital media lately.

     

    One, launched by sports broadcaster Star Sports, hits out at multi-system operator (MSO) Hathway for not providing Star Sports channels to subscribers, apart from suggesting that subscribers move to other MSOs or a DTH platform.

     

    The other, launched by Hathway, informs viewers to subscribe to Star Sports channels as part of the MSO’s ‘Sports Package’ or on a la carte basis.

     

    Subscribers may be confused but what is obvious is that Star India and the MSO, once close partners, seem to be no longer on the same page and are scrapping with each other like a couple after a bitter parting. And that too in the public eye.

     

    But both deny that they are hitting out at each other; they say they are just protecting their individual interests.

     

    “We noticed that several subscribers didn’t even know how to subscribe to our channels and were therefore under the impression that the channels had been switched off at our end. We were thus compelled to issue an advertisement in mainline newspapers to assist our viewers and clear all misgivings so that consumers could explore their options to avail our channels,” explains the Star Sports spokesperson.

     

    “We would like to highlight that we have received complaints that many consumers are facing lot of difficulties in getting our channels activated. There are newspaper reports talking about subscribers facing challenges in availing signals from Hathway.”

     

    On his part, Hathway Cable & Datacom CEO Jagdish Kumar says, “We had to launch the campaign because of the wrong information that was being spread against us. We have not pulled off Star Sports channels. We have simply removed them from our premium package and are now giving them to subscribers either a la carte or through our Sports package.”

     

    Didn’t Star Sports spark off Hathway’s move by raising the sticker price of its channels? “We have not increased the price of our channels.  The channel pricing is regulated by the Telecom Regulatory Authority of India (TRAI) and no broadcaster can unilaterally increase the channel price,” the spokesperson shoots back.

     

    However, unconfirmed reports are that Star Sports asked Hathway to pay for a higher number of subscribers this year – when its contract came up for renewal –  if it wanted  the channels to be placed in any of its packages. Something which most broadcasters are resorting to with the onset of greater transparency following the wider spread of set top boxes in subscriber homes.

     

    This was something which Hathway was not open to hence it yanked Star Sports channels from its existing pack and begin charging separately for them.

     

    “I don’t understand why it is being made out as such a big issue? Isn’t digitisation about this? We are giving the consumer the power to choose. Any consumer who wants the sports channels can get them either a la carte or they can subscribe to our sports pack,” Pillai maintains.

     

    The Star Sports spokesperson however insists that the move has affected Hathway consumers adversely. “They are today worse off than before as they have to now pay more to Hathway for availing the same set of channels, including the Star Sports Channels,” he empasises.

     

    Pillai contradicts this saying, “Who says we are charging more? We have instead reduced the package price for consumers, who have opted for a la carte channels.”

     

    He claims that the MSO has reduced the price of its premium package by Rs 5 and is offering Star Sports 1, 2, 3 and 4 at Rs 17.25 per month. Consumers opting for these channels would have to subscribe for a period of three months, he adds. Else, the channels are available as part of its Sports Pack with Neo Sports at the same price and consumers could subscribe to that for a period of one month.

     

    The Star Sports spokesperson then accuses Hathway of not giving prior and adequate notice to its consumers before making these changes to its package composition and “discontinuing the exhibition of Star Sports channels”.

     

    “We have received information that Hathway did not protect those who had subscribed to the packages containing the Star Sports channels in the last six months nor did it protect those who had paid for the same on a yearly basis, thereby breaching its obligations under the relevant regulations. We have been inundated with enquiries from agitated and confused consumers of Hathway, who saw their favourite sports channels suddenly going off  their TV screens, thereby missing out on quality sporting action on our channels,” alleges the spokesperson.

     

    Pillai has a quick riposte to this allegation. Says he:  “Who says we had not given any prior notice? We had sent out a public notice 20 days back informing our subscribers of our plan. In fact, we were also running scrolls on the TV screen, informing them of the same.”

     

    So, can consumers expect some kind of resolution soon? “We have always acted in the spirit of cooperation. As a result, our content is widely available across cable TV and DTH platforms,” highlights the Star Sports spokesperson. “Having said that, we cannot accept that our viewers are taken for granted. We also expect distribution platforms to behave responsibly as both broadcasters and distributors owe a minimum quality of service to our viewers as provided for in the regulations framed by TRAI.”

     

    Pillai reveals that his company is just following market demands, adding that  “we are examining all options. The case had come up for hearing in TDSAT, where the tribunal had disposed-off the petition of Star Sports. I don’t see a reason for the sports broadcaster’s reaction. We are just complying with what digitisation was meant for.”

  • China’s Shenzhen Coship plans to set up STB making unit in India

    China’s Shenzhen Coship plans to set up STB making unit in India

    KOLKATA: China’s Shenzhen Coship Electronics Co Ltd, a cable television and broadband equipment maker, plans to set up a set-top box (STB) manufacturing facility in India.

     

    “We are planning to set up a set-top box manufacturing facility with a capacity to make 2.5 lakh units a month in India to start with and the scale up the operations on the back of demand,” Vipan Kumar Sharma, Country Manager, India, Coship, told indiantelevision.com, on the sidelines of Cable TV Show 2014, an exhibition of cable television industry in Kolkata.

     

    “We will see and evaluate the benefits and policies of the government”, he said.

     

    Sharma further said the company might look at a place near Delhi, in Chennai or around Pune. “We already have our technical office at Chennai and our commercial office is in Delhi,” he said. 

     

    The proposed STB manufacturing unit would employ about 1,000 workers, he said.

     

    Sharma did not disclose the investments that would be required for setting up the STB manufacturing facility but said the average cost of producing one STB would be around $22.

     

    Shenzhen Coship, which has already supplied 10 million STBs in India since 2007, is planning to export to India another 5 million STBs by the end of 2014.

     

    The company’s clients include Siticable, Kerala Communicators Cable Limited (KCCL) and Sun Direct DTH.

     

    Sharma said it is also in talks with Videocon d2h for supplying its STBs.

     

    He said demand for STBs in phase III and phase IV of digitisation would be the growth driver for the company in India. He, however, said in rural and semi-urban areas, availability of funds is an issue for the multi-system operators (MSO) and local cable operators (LCOs).

     

    As per the Information and Broadcasting Ministry estimates, a total of 75 million STBs would be required for installation in the third and fourth phases of digitisation. The deadline for the third phase of digitisation is 30 September and for the fourth phase is 31 December.

     

    Shenzen Coship has three factories in China with combined capacity to manufacture 25 million STBs  — both SD and HD — a year.

  • Silverline Television Network to seed 25 lakh DEN STBs in WB

    Silverline Television Network to seed 25 lakh DEN STBs in WB

    KOLKATA: West Bengal is embracing the digitisation process open heartedly. So while earlier the MSOs from the state got together to speed up the gross billing in the city, now Silverline Television Network (STN), which distributes the services of DEN Cable TV in West Bengal, plans to seed close to 25 lakh set top boxes (STBs) in the state by December, 2014 in Digital Addressable System (DAS) phase III and IV areas.

     

    Silverline Television Network, a joint venture between DEN (51 per cent) and Silverline Broadband Services (49 per cent) was formed in 2011. STN has already installed four lakh STBs in the state in DAS Phase I and II with an investment of 150 crore. For the next installment, it has earmarked an investment of Rs 300 crore, which alongside the cost of the STBs, will also be used in increasing its network and fibre connectivity in the state.

     

    “We have seeded 3.60 lakh STBs in the Kolkata Municipal Area area and another 40,000 in the rest of West Bengal including 24 North Parganas and Hooghly. In phase III and IV of digitisation, we plan to install approximately 25 lakh more set top boxes in the state. By December 2014, we want to reach the target of 30 lakh STB,” remarked STN director Apurba Banerjee optimistically as he spoke about strengthening its presence within the state. “Our connectivity has already reached Siliguri, Bankura, Raichak, Bangaon and a part of Diamond Harbour,” he added.

     

    The company has one digital headend at present and offers 280 channels. When quizzed about the most popular package in phase I area, that is the KMC area, he said, the monthly subscription available at Rs 180 was quite popular initially. However, since TEN Sports wasn’t available in that, many switched to the Rs 230 monthly package.

     

    The cable TV analysts say the Phase III and IV of DAS is going to be smoother and easier as consumers in smaller towns have already started enquiring about the STB. “Going forward, it will be a smooth journey for DEN to install 30 lakh STBs in West Bengal,” remarks an analyst.

     

    DEN, a cable TV distribution company, reaches an estimated 13 million households in over 200 cities across 13 key states in India, like in Delhi, Uttar Pradesh, Karnataka, Maharashtra, Gujarat, Rajasthan, Haryana, Kerala, Madhya Pradesh and Uttarakhand among other markets. DEN Networks has seeded around 5 million set top boxes.

  • Once we move to gross billing, revenue will increase three-fold: V D Wadhwa

    Once we move to gross billing, revenue will increase three-fold: V D Wadhwa

    These are changing times for the Indian cable TV industry, what with gross (consumer) billing starting in phase I cities and 27 January being the last date for submission of duly-filled Consumer Application Forms (CAF), following which, multi system operators (MSOs) will need to start major switch-off of signals.

     

    In all of this, Essel Group-owned SitiCable Network, earlier known as Wire and Wireless (India) Ltd, has proved to be a game changer of sorts. Under the leadership of chief executive officer V D Wadhwa, the company has been at the forefront of change; whether it is giving access to the Subscriber Management System (SMS) to local cable operators (LCOs), launching local cable TV channels or the latest plan to launch a service on iOS and Android for consumers to view TV content on their Apple devices and smart phones.

     

    An alumnus of Harvard Business School and a fellow member of the Institute of Company Secretaries of India, Wadhwa served as managing director and CEO for business operations in India and SAARC countries with the Timex Group before taking charge as the CEO of SitiCable Network in May 2013.

     

    An avid squash player who dabbles in adventure sports, travelling and driving, Wadhwa took some time out from his busy schedule to speak to Seema Singh of indiantelevision.com on gross billing, setting up of cooperatives and the road ahead for SitiCable.

     

    How has phase I and II of digitisation been for SitiCable? How much has been invested and what have been the returns?

     

    We have approximately 10 million subscribers in the analogue universe. Of these, we have seeded 3.6 million Set Top Boxes (STB) in phase I and II of digitisation. The total investment so far has been to the tune of more than Rs 500 crore.

     

    As far as the returns are concerned, the investment has been done with a payback period of four years. Expecting anything in the short term is not a realistic scenario. No one gets returns on investments immediately.

     

    How many set top boxes will be needed for completing phase III and IV? What is the proposed investment for these phases? How are you looking at generating investment in the company?

     

    Phases III and IV of digitisation has a total universe of about 90 million. Of these, we are targeting 6-7 million homes. At a gross level, we will require an investment of Rs 1200 crore. On a net basis, we are expecting an investment to the tune of Rs 600 crore.

     

    The funding of Phase III will be largely done through warrants’ funding of Rs 243 crore, which is likely to be invested by promoters before March 2014. Balance funding requirement will be met through internal accruals and raising of further equity, as may be required.

     

    By when do you think you will be able to reap the benefits of digitisation? By what percentage do you see the revenue going up?

     

    The benefits of digitisation have already started trickling in and the full benefits will be visible from FY16.

     

    Once we move to gross billing, the revenue will increase over threefold of what it is currently. Right now, whatever revenue is booked in the books of accounts is on net and not gross basis. Last year for the year ended March 2013, our top line was Rs 483 crore. In the last two quarters, we have achieved revenue of over Rs 300 crore and this growth trend in the current quarter continues. Once gross billing starts, the revenue will increase to over three-fold. 

     

    Have you come to any consensus on revenue share and billing with Last Mile Owners (LMOs) in Maharashtra? Are you going to allow LMOs to bill in Mumbai? By when do you see billing starting in Mumbai?

     

    We have a 33 per cent revenue share with all our local cable operators (LCOs) and we do share 25 per cent of the carriage revenue with them, which is not the case with other Multi System Operators (MSOs). So, we are not facing any problem anywhere in the country. We have also given access to the Subscriber Management System to LCOs. Our approach is to consider the LCO as an integral part of the business and both the MSO and LCO have to co-exist. We, therefore, believe in empowering the LCOs by training them and providing them the backend support to enable them provide better customer services. This is the biggest advantage for SitiCable and this is helping us to significantly improve our subscription revenues as compared to other MSOs.

     

    Now that billing has started in Phase I cities, how has the response been? Do you think billing has succeeded in bringing in greater transparency? How is it helping the MSOs?

     

    It is too early to comment. The LCOs are not habituated to the system of gross billing. According to me, it will take at least two to three months for billing and collection to stabilise as per package. But there is gradual acceptance among the LCOs for the gross billing regime. .

     

    Also, I would like to add that in Delhi, between Hathway Cable & Datacom, DEN Networks and SitiCable, we have engaged Mckinsey to help us stabilise the gross billing and gross collection. They will ensure that all MSOs follow the common policy of billing, collection and dunning. Since gross billing started in December, it is expected to stabilise in the current quarter.

     

    The Telecom Regulatory Authority of India (TRAI) had given 27 January as the deadline to MSOs for collection of all Consumer Application Forms (CAFs) and feeding of details in the SMS for phase II cities. Are you switching off signals or is the process complete?

     

    We received 94-95 per cent CAFs in phase I cities and for the remaining, the signals have been switched off. So in that way, we have completed 100 per cent CAF in phase I and submitted the compliance report to the TRAI. For phase II, 91 per cent of CAF has been completed. The regulator for all these months has been patient in giving us extensions. And, I personally believe if the deadline goes on getting postponed, the work will never be completed. The ultimate solution for these problems is to switch off signals for those who have not filled the forms and that is what we are doing, which is in complete compliance with TRAI’s order. In fact, in the last one week, we have switched off 50,000 subscribers nationally. This is to ensure that compliance as per TRAI regulation is achieved.

     

    Where do you see entertainment tax headed? What led to taking the matter to court? Do you think the ruling will be passed in your favour? Do you believe that entertainment tax should be reduced?

     

    As per the law, the MSO is responsible for entertainment tax. We approached the Delhi High Court, since we have always been collecting and depositing entertainment tax, and we did not want to face any coercive action being taken by the tax authorities. As per our information and inputs received from the market, other MSOs are also collecting tax from LCOs regularly. While the H’ble high court has asked SitiCable to keep submitting the entertainment tax, the high court has given the stay against any coercive action being taken by the Tax Department against other MSOs since they have taken the plea that they are not invoicing and collecting tax so far. No decision has been taken on who will be responsible for collecting and paying the entertainment tax as yet.

     

    In SitiCable, we firmly believe that the payment of entertainment tax should be with the MSOs. Since the invoice is being raised by the MSO and the LCO is collecting the subscriber fee, I feel the power of collecting and depositing entertainment tax should be with the MSOs.

     

    I have a very different view on entertainment tax. I do not understand why a consumer needs to pay both service tax and entertainment tax. When we provide them with cable TV, what is it? Is it a service or entertainment? Even for movies, consumers pay only entertainment tax, then why is it that the consumer has to pay entertainment tax and service tax for cable TV. We have raised this issue on several occasions to both the Information and Broadcasting Ministry and the TRAI, but without any heed.

     

    The tax rate has to rationalise across the country. In UP, the monthly entertainment tax is 25 per cent of the subscription fee, while in Maharashtra, it is Rs 45; Delhi – Rs 20; Bengaluru – 6 per cent of the total subscription fee; and Kolkata, it is Rs 10. This differential tax structure will not allow the industry and gross billing to stabilise in these respective states.

     

    I am hopeful that the tax will come down once the process of digitisation is complete. Currently, the tax department is unable to gain significantly due to digitisation. With complete digitisation, there will be transparency and hence, more tax collection. Then there will be rationalisation of tax.

     

    By when do you think the process of digitisation will be complete?

     

    There is no reason why digitisation will get delayed. The I&B Ministry is dedicated and so is the TRAI. Even the MSOs are gearing up for funding, getting STBs and seeding them. So I don’t see any delay in completion of digitisation.

     

    Is the cable TV industry prepared to offer consumer service as available internationally?

     

    I think there is a long way to go for that. We are taking one thing at a time. Currently, the Indian consumer is not even habituated to gross billing and taxation. The Indian cable TV market has not matured enough to be able to offer services like those internationally. Once gross billing is stabilised and every one becomes habituated with the system, only then we can move forward.

     

    However, from the Value Added Services (VAS) point of view, we have started broadband service in the east and soon, we will be starting in the north. Also, we will be providing content on multiple screens to our subscribers.

     

    Is broadband a key play in your revenues going forward? How will it be delivered?

     

    Of course, broadband will play a key role. We will also soon introduce Docsis 3.0, which is the future. Besides broadband, by the end of this quarter, the content available on TV will also be available on iOS and Android platforms. The technical team is working on it and if there are no glitches, we will be launching the service on both the platforms together. We are the first cable TV operator to have thought of this service.

     

    Do you believe building local cable TV channels is the way forward? How much will you invest in this? And what is the monetisation opportunity?

     

    Local cable TV channels help in connecting with the consumers. We plan to launch four to five channels in each geography. While we have seven channels in central India, seven in Jaipur and four in Delhi, we plan to continue with this in other parts as well.

     

    Launching local cable TV channels does not cost much since we already have a studio facility in areas where we have a presence. Such endeavours give a competitive edge over the Direct-to-home operator, since they cannot operate a local channel with local content and the MSO, as they do not have the facility for launching a local channel or have a rather small presence.

     

    A local channel helps in giving out local news in local languages and most people prefer this. Then, advertisements help in generating revenue. So commercially launching such channels makes sense for the MSO.

     

    How do we see the national landscape panning out: will there be a few key national MSOs? Who will these be?

     

    Like in phase I and II of digitisation, the market will be dominated by four national MSOs: Hathway, DEN, SitiCable and InCable. It is only after complete digitisation that the country can expect foreign players to enter the market. These foreign players will bring better technology, transparency and competition. This will prove beneficial for the national players as well.

     

    How do you see the MSOs coping with phase III and phase IV? Will DTH benefit? Or will we see new local players emerging?

     

    While in phase III, the existing MSOs will play a major role and benefit, phase IV will witness DTH playing a major role. In phase IV, with towns having 5,000-10,000 households, it will not be commercially viable for cable TV operators unlike DTH players.

     

    Local players may emerge in some markets, but as seen in phase I and II, the industry has been going through consolidation since digitisation requires huge Capex. The local players emerge since they can manage initial investments. But, they are not technology ready to serve consumers. Also, this is a highly regulated industry, which will be difficult for them to cope with. Considering they do not get placement fee from broadcasters, they can operate for a maximum of one to two years. 

     

    What challenges do you anticipate in Phase III and Phase IV?

     

    Content is the biggest challenge. Currently, the ARPUs for phase I and II cities is not more than Rs 150. If it remains the same for phase III and IV, it will be difficult for us to operate in these towns. Broadcasters need to have differential pricing for these markets.

  • MCOF to meet MSOs to discuss billing issues

    MCOF to meet MSOs to discuss billing issues

    MUMBAI: The easier a process becomes, the better it is. It seems this is the process that Maharashtra Cable Operators’ Foundation (MCOF) has opted for in order to make the entire digitisation process a smooth ride. In a new initiative, the apex body of cable operators in Maharashtra has sent a letter to all the MSOs inviting them to a meeting where they would discuss about the proper implementation of digitisation.

     

    In the letter, of which Indiantelevision.com has a copy, the MSOs have been requested to schedule the meeting in the coming week.

     

    When both the parties meet, they are expected to discuss issues related to: interconnect agreement, billing, Consumer Application Form (CAF), package activation, a la carte channels choice, disconnection of set top boxes (STBs) without notice, misleading and false  information given about the LMO to the customer over call center, ownership of STB and uniform rates.
    We are making an effort from our side to meet each MSO separately, says Arvind Prabhoo

     

    The letter has come out a day after the Telecom Regulatory Authority of India (TRAI) gave the MSOs the final deadline of 15 December to submit the duly filled CAFs and also implement gross billing by December.  “CAF is not the only issue, there are issues related to service tax and billing,” says MCOF president Arvind Prabhoo.  “There is no clarity on whether the consumers will be billed on the service provided by the MSO or on the MRP of the package that the subscriber opts for,” he adds.

     

    The meeting has been called to discuss the issues concerning both the MSOs and the LMOs.

     

    “We are making an effort from our side to meet each MSO separately. In the meeting, we will try and understand the system of billing devised by the MSO and make suggestions, if required. If not, we will go hand-in-hand with MSOs, provided our legal status is maintained,” informs Prabhoo.

     

    The apex body which comprises more than 1500 LMOs is also unsure about the settlement mechanism between the MSO and the LMO once the billing is done. “The MSOs so far haven’t spoken to the LMOs on how they will pay the LMO for the customer it bills,” points out Prabhoo.

     

    Expressing concern on the 15 December deadline set for submitting CAFs, Prabhoo says, “If 50 per cent CAFs have been filled in one year on an average, how does TRAI expect the remaining 50 per cent to be filled in next three weeks? Also, with the holiday season coming in, is TRAI looking at switching off STBs, if the deadline is not met?”

     

    With TRAI pushing MSOs to start gross billing from December, Prabhoo comments, “The issue relating to entertainment tax is subjudiced. So when the MSO says it will start gross billing from next month, is it looking at levying entertainment tax as well?”

     

    It should also be noted that the Nasik Cable Operators Association has moved the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) on billing. While TRAI was supposed to respond to it on 22 November, the tribunal has granted time till 23 January to the regulator to respond. “So when both entertainment tax and billing is subjudiced, why is TRAI pushing cable operators for contempt of court?” he questions.

     

    On the issue of TRAI asking the MSOs to either convince the LMOs to start billing or do it themselves, Prabhoo sternly says, “They can do it, if they want. We are not going to be delivery boys. We are owners of our own businesses. And we have the right to bill our own consumers and that is what we are fighting for.”