New Delhi: The Cable Television Networks (Regulation) Amendment Bill, 2011, was passed in the Lok Sabha on Tuesday, putting the 20,000 crore cable TV industry one step closer to going digital and promising better picture and sound quality to consumers.

By Reuters

Digital set-top boxes will deliver better video and audio quality to television households, said Ashok Mansukhani, president of MSO Alliance, which groups large cable networks.

“Consumers will also be able to pick and pay for the channels they wish to see," he said.

The move is especially relevant for broadcasters who get barely 15-20% of the total revenue generated from subscription, said A. Mohan, president (legal and regulatory affairs), Essel Group, which owns Wire and Wireless (India) Ltd, a multi-system operator. “Lack of an addressable platform harms the broadcasters," he said.

Digitization will allow firms to offer value-added services to the consumers, he added.

Information and broadcasting minister Ambika Soni said the measure was a major step towards reform; going digital means bringing TV networks in India on a par with their counterparts in the US, the UK and South Korea, she said.

Soni expects set-top box prices to fall. The boxes will be available on payment through instalments and on rent, she said, adding that the Telecom Regulatory Authority of India (Trai) will impose a cap on tariffs for subscribing to channels.

Though some Lok Sabha members expressed their ire at the content on some channels, including those broadcasting news, almost the entire House supported the Bill.

“We welcome and laud this effort on the government’s part. We believe this to be a potential game changer," said Uday Shankar, chief executive of Star India Pvt. Ltd. “There are tremendous benefits in store for not only the television industry, but also the economy as a whole in terms of increased investments resulting in sustained employment generation and income growth."

Trai will bring out a consultation paper to create a regulatory framework for digitization next week. For the nearly 30,000 crore required to digitize cable, the networks are pushing for a higher foreign direct investment limit.

According to an official from the ministry of information and broadcasting, the Bill could be tabled in the Rajya Sabha on Wednesday. Since the cabinet committee on economic affairs in October 2011 had cleared an ordinance for digitizing cable television networks, its introduction in the Lok Sabha and the Rajya Sabha are just “procedural formalities", the official said, refusing to be identified as he is not authorized to speak to the media.

Cable companies are expected to convert their analog systems to digital in the four metro cities by 31 March 2012. Cities with a population of one million will adopt digital cable by 31 March 2013 while the deadline for the whole country to go digital is 31 December 2014.