New Delhi/Mumbai: The Indian government is likely to amend rules in the next few days to completely digitize the broadcast of the country’s Rs 20,000 crore cable and satellite television industry by 2014.
This is expected to improve subscription revenue for broadcasters beaming to 116 million homes and end the hefty carriage fee they pay cable TV operators, who are opposed to the move.
An ordinance to amend the Cable Television Networks (Regulation) Act is on its way, an information and broadcasting ministry official said. “The ordinance will amend Section 4A of the Cable TV Act that currently does not have any provision for pushing the free-to-air channels through the digital box,” he said, requesting anonymity given the sensitivity of the matter.
The Telecom Regulatory Authority of India (Trai) had in August 2010 suggested that television transmission in Mumbai, New Delhi, Kolkata and Chennai should be digitized by 31 March, with the rest of the country following suit in phases by December 2014. The government accepted the recommendations with minor revisions.
“We can’t meet the deadline unless we amend the Act immediately,” the ministry official said, adding that it will later be ratified by Parliament.
Broadcasters said that if issued, the ordinance will be the single most important development for the broadcasting industry as well as consumers.
“Instead of paying huge carriage fees, we could put that money into creating good content,” the chief executive officer of a news broadcast group said on condition of anonymity. “Also, channels will no longer need to be only advertising driven, sparing viewers 20 minutes of commercial breaks during programmes.”
Cable operators have strongly opposed the move.
The government is in a hurry to issue the ordinance as it wants to avoid any discussion or debate on its move that’s clearly in favour of the broadcasters, said a top executive of a large cable TV operator, who declined to be named.
Cable operators would also need to invest at least Rs 25,000 crore for complete digitization, according to him. “The ordinance is not expected to raise the FDI (foreign direct investment) limit from the current 49% to 74%,” he said. “How are we expected to meet our funding requirements?”
The ministry official said although the FDI limit will not be spelled out in the ordinance, there’ll be an enabling provision to increase the threshold. “Trai had recommended raising it to 74% from from 49% and we had accepted it,” he said. “We are adding an enabling provision so that the government can make changes from time to time.”
Digitization will not add any value to the consumer, who will have to then invest in a set-top box, said Jagjit Singh Kohli, managing director and chief executive of Digicable Network India, a large cable network.
Ganesh Naidu, president of Cable Operators and Distributors Association and promoter of cable company Scod18, fears a backlash from many consumers who will be reluctant to invest in a set-top box. Moreover, since there will be a sudden demand for millions of such boxes, their prices would also escalate.
Trai should decide on tariffs between cable operators and broadcasters and between operators and consumers, said Roop Sharma, president, Cable Operators Federation of India “It cannot just be left to market forces,” she said.
The opposition of cable operators was surprising because the timeline for digitization was decided in consultation with them, the ministry official said.