Digitization needs light-handed regulatory environment

Digitization needs light-handed regulatory environment

New Delhi: Simon Twiston Davies, chief executive of Cable and Satellite Broadcasting Association of Asia (Casbaa), strongly feels that India’s robust direct-to-home (DTH) market will empower consumers to demand better content. Casbaa, the Hong Kong-based association promoting the growth of digitization and pay TV in Asia, recently organized a seminar in India for regulatory bodies, content providers, cable and DTH operators to exchange views on digitization.

Davies predicts more content generated for consumption on 3D television and high-definition platforms especially for urban consumers in India. He said in an interview the industry will look at rural consumers in the near future as that market will provide greater opportunity in the pay TV segment. Edited excerpts:

How does Casbaa view India’s digital landscape?

The DTH market is dynamic in India. It’s an unprecedented success because nowhere else in the world have we seen such fast-paced growth in the DTH sector. India boasts of six major players in the category and within just five years, DTH has reached over 25 million households. That’s an extraordinary achievement. It’s also critical because DTH provides an environment to enable more choice for the consumers and addressability.

What are the areas of concern for the industry?

The biggest concern should be to offer maximum choice to consumers. Right now, India has around 300-400 channels but cable consumers have access to not more than 30-40 odd channels. So while DTH operators have already kick-started competition— and, in the bargain, begun offering attractive choices to consumers—it’s time for the cable industry to start competing with the DTH industry.

How do you expect the last-mile cable operators to compete with DTH?

The last mile operators represent the relationship with almost 95 million consumers. It (cable) is an enormously important segment. Also, if India has to convert 95 million cable homes digitally, a natural consolidation of the market is inevitable. The 16,000-odd last mile operators are highly fragmented and consolidation has to happen. Don’t forget that digitization requires huge investments and, for that, scale is required. The Indian cable market forgets that there will be return on investment, benefiting it in the long run eventually.

Experts say that digitizing of all television households will require investment to the tune of Rs40,000-50,000 crore. Will getting that investment be a challenge?

India’s big story in the near future is that capital will indeed be invested in creating better infrastructure for digitization. However, what needs to facilitate this movement is further consolidation in the sector. That’s why last-mile cable operators need to become an intrinsic part of this value chain; consolidation from their end can automatically provide scale that’s needed for attractive investments. What we also need is a light-handed regulatory environment to facilitate this movement for the industry to grow. These are some challenges that the industry continues to face right now.

Do you think the industry can phase out analogue TV services by 2013 as recommended by the Telecom Regulatory Authority of India (Trai) in August 2010?

It’s a laudable objective but it’s debatable. It may be hard to achieve digitization by 2013, the sunset date given by Trai. However, since the announcement has been made by the regulatory body, what we now need is action to make an immediate change. Casbaa will continue to create forums for dialogue within the regulatory, cable, content and DTH communities for facilitating the move towards complete digitization.

Do we have the political will to meet the sunset date?

We certainly hope so. Trai recommendations are essentially goals that are endorsed by the ministry of information and broadcasting and we need to see regulatory bodies and the overall industry coming together for a big change in encouraging an addressable landscape for the country. We are very hopeful that it will happen. After all, both technology and capital has to be firmly in place along with equipment like set-top boxes for households that continue to have analogue television services.

What will be the biggest achievement of digitization in India?

It’ll allow a greater understanding of the dynamics of the pay-TV market in India. That’s because digitization and addressability go hand-in-hand. When the industry— through digitization—understands exactly the number of subscribers, it will lead to a better understanding of consumer activity. I do feel that consumers in rural India will, over time, provide immense opportunity in pay-TV segment. Remember, one unspoken beneficiary of digitization will be the government because it will be able to collect taxes that go untapped currently. Simply put, digitization encourages addressability, which in turn encourages measurability of the market.

On a different note, content-wise, the urban viewer will see a marked change in services, in that more content will be created keeping in mind audience consumption on 3D and high-definition television sets.