Bharat Sanchar Nigam Limited (BSNL) has announced its foray into
the broadband segment at a nominal fee of Rs 1000 per month and
"free" set-top boxes. Another big gun, Reliance Infocomm,
is also mulling its foray into the broadband entertainment sector.
A cable industry veteran says: "The threat of outside competition
is looming large over the cable trade. The competition is not from
the next-door cable operator or multi-system operator (MSO) who
is eating into one's territory but from DTH (direct to home) and
from telecom companies who offer broadband services."
Both these "attacks" come at a time when the cable industry
is grappling with uncertainty related to the implementation of the
conditional access system (CAS) and direct-to-home (DTH) television
BSNL, the country's largest telecom service provider, will offer
broadband services in several cities in a phased manner by the end
of 2003. BSNL will reach out to the service using existing last-mile
copper wire connectivity and xDSL (Digital Subscriber Line) technology
bypassing the fibre optic networks. Reliance Infocomm is also expected
to make its foray around the same time. The content aggregation
system for the project is already in place.
Cable industry sources say that these behemoths could wipe out
the smaller cable operators. All these threats will lure away consumers
(seeking content) from the cable distribution networks.
Also, broadcasters who want consumers to get into the habit (mode)
of paying for content are opposing telecom operators who would offer
TV content and other services under a single umbrella to consumer
A cable operator who is also a Reliance Infocomm mobile phone services
user says (on conditions of anonymity): "Reliance is already
aggregating content for its mobile telephony services and has joined
hands with several content providers including broadcasters and
news channels. Everything is available on the small mobile screen
from the central server. It won't be difficult for Reliance to make
the transition from the small mobile screen to the larger TV screen."
Jaideep Pujari, a software engineer, agrees: "The business
of content providing has undergone a plethora of change with the
digitalisation of content. Digitised content can be stored and distributed
in various ways - DVDs, DTH, broadband, Internet, mobile telephony
amongst others. There is a lot of flexibility and multiple options
available in terms of quick data transfer. One need not depend on
the traditional cable distribution system which has ruled India
since the last decade or so!"
Industry observers say that companies such as Reliance Infocomm
can leverage its fibre-optic network to provide a wide array of
services to consumers. They feel that consumers will not be able
to refuse a good offer from Reliance Infocomm.
"If Reliance offers a consumer a single package comprising
wireless in local loop, mobile phone facilities, Internet broadband
and cable TV services at a lower rate than what consumers end up
paying for each individual service, will consumers refuse? Also,
Reliance has deep pockets and will be able to sustain at lower margins
or even losses for some time - but the cable operators will be wiped
out if they offer such rates," says a cable operator from Mahim,
And the fear of the cable operators is very real. According to
the information available with indiantelevision.com, one of the
plans being mulled by Reliance is to sell a consumer the company's
telecom services and throw in the cable service free as a sop. Later,
these sops can be increased with newer services being offered -
including gaming for children on cable as also on cell phones. Now
if that happens, the friendly neighbourhood cablewallah can say
goodbye to his business.
However, broadcasters have their own reservations against this
kind of an approach wherein a telecom company offers content on
demand. A programming executive working with a broadcasting company
says: "If consumers can access content at their own convenience,
then the concept of "prime time" disappears. Advertising
revenues will be hit. Broadcasters won't be able to charge a premium
for their content offerings and existing prices will remain static
or dip. Consumers will get the option of deleting ads and TV commercials."
Telecom companies will ensure that households pay a fixed amount
for popular movies and then will allow them to watch the same over
a specified time interval - which could be as long as 24 hours!
Broadcasters want consumers to get into the mode of paying for
content. Concepts such as interactive TV and Open TV are detrimental
to their interests. One can empathise with them as programming costs
are still high.
One cannot help remembering the words used by Sony Entertainment
Television chief executive Kunal Dasgupta in an interview with a
leading publication. "If you pay peanuts, you will get monkeys!"
Are the pampered consumers listening?