Cable & Datacom CEO K Jayaraman
has been in the thick of things in
the rapidly evolving Indian cable
TV market. His network has in fact
been at the forefront of a quiet digital
transformation, which has seen MSOs
going in for OFC and digital headends.
Hathway has recently also been dropping
prices of its boxes in a bid to increase
offtake, and also exploit digital
But with Tata Sky's DTH service expected
in 2006, he believes that cable TV's
hold over the top end of the market
may get loosened, especially with
DTH operators delivering a possibly
better content offering. He adds that
for digital cable to catch on, the
last mile operators will have to be
In this commentative piece on the
cable TV sector, Jayaraman tells Indiantelevision.com
how the cable guy needs to pad up
for battle in 2006.
wasn't a very good year for the cable
TV industry. Growth was sluggish;
digital cable hardly moved; subscription
revenues, limited by the cap on rates,
almost stagnated; and business models
however, sparked a bright note was
the carriage or placement fee. As
channels mushroomed and bandwidth
clogged, broadcasters were willing
to spend liberally on distribution.
This helped a bit in offsetting losses
from our analogue business. Cable
internet also picked up. And the urgency
among the multi system operators (MSOs)
to drive digital cable grew, though
very little was done towards this
actually on the ground. We launched
our digital services in Pune and Bangalore,
adding to our presence in Chennai,
Mumbai and Delhi.
In 2006, cable TV operators will have
to really gear up to take on the ominous
threat of direct-to-home (DTH) and
other delivery platforms that are
planning for launch. They can fight
these new threats only with digital
if some MSOs are ready with the system,
the industry does not seem to be interested
in any manner. Also, MSOs should have
indulged in more aggressive marketing
of digital cable in 2005. That hopefully
will be corrected in 2006. Better
marketing, cross selling, promotion
and attractive pricing will have to
be used to make digital cable acceptable.
are moving in that direction. Towards
the end of the year, we dropped prices
of our digital set-top boxes (STBs)
and introduced an easy instalment
scheme to entice our subscribers to
migrate from the analogue to the digital
service. Subscribers can pay in equal
instalments of Rs 100 spread over
24 months. They will have to make
an upfront payment of just Rs 1,000.
In 2006, other cable networks will
also work out various consumer friendly
There is very little time left to
sit back and relax. The real fight
between cable and DTH will start in
the coming year with the launch of
Tata Sky. By then, issues over interconnect
and sharing of content will have sorted
out. Full content will, thus, be available
on both the platforms. The product
on DTH will be no way inferior to
were lucky that this was not the case
in 2005. Dish TV was not able to sew
up content from the Star and Sony
bouquet of channels. It got most of
its subscribers from the non cable
once all the content issues are resolved,
there is a huge market up for grabs.
The top end of the market can be very
slippery for us. A lot, though, depends
upon the investments the DTH players
make and how much they deploy to acquire
customers. But one thing is sure:
they will go to the urban and top-end
markets, which they perhaps couldn't
in 2005 because of content issues.
can be as successful as GSM mobile
phone is in India today. DTH operators
will offer attractive prices like
deferred payment plans and one year
subscription free to entice subscribers.
Dish TV is already subsidising costs
but does not have the full content
offering yet. Besides, DTH service
providers can offer various price
packages by bundling channels.
conditional access system (CAS), there
can be no addressability on cable
TV. One big handicap cable operators
face is this: we can't offer consumers
the option to select the channels
they want to watch and pay for. In
DTH, consumers can control their bills.
As DTH platform providers can package
their offerings, this will give them
an edge. We can't offer proper packaging
and products to customers.
will wait for DTH to come. They will
compare the products before they take
to digital cable.
have not been able to successfully
push digital cable. There is no support
from the last mile operators.
digital cable has to catch on, the
last mile operators have to be fully
behind it. That is the only way we
can secure our networks from DTH.
Perhaps, the last mile support will
be better once DTH arrives in its
complete form. But we have to cover
up the SEC A homes very fast. These
subscribers are a natural choice to
migrate; we have to keep them with
us. The big challenge for cable operators
is to convince the customers and the
last mile operators about digital
DTH comes, we expect the regulator
to let go of the price control on
cable TV. Broadcasters can then increase
prices to cable. We can't compare
with DTH which has a 100 per cent
declaration of subscriber base. Cable
prices are based on under-declaration.
This can be another problem on hand.
We will have to wait and see how it
evolves. But if that happens, then
DTH can use this to funnel lower prices
to consumers. Part of that subsidy
will be through that.
in any case, will support DTH as it
provides a new revenue stream. Besides,
it is transparent and will bring in
competition to cable. Also, prices
can fall - like it did in the case
of mobile phones. Too many players
will bring down the pricing. Aggressive
plans will be laid out for customer
acquisition. Prices could fall or
customers could get better proposition.
perhaps, will take longer to set in.
But if and when the platform comes,
it will become a threat. The challenges
will be different as IPTV can bundle
voice, data and video services.
the US, cable has fought back against
DTH and the telecom players. Cable
companies have invested heavily in
digital cable, triple play and other
value-added services. But in India
if digital cable is going to be only
in theory, then we can't do anything.
the analogue business, hopefully peace
on the ground will stay. MSOs and
other independent operators can't
afford to fight over territories;
poaching local cable operators from
rival networks will be an insane act,
if it happens. For there is no guarantee
on analogue wholesale business.
DTH and other technologies next year,
the carriage or placement fee phenomena
will stay. In fact, it will go up
marginally. Carriage fee is a story
that will continue for at least another
three years till the digital migration
happens. But it will not generate
a large enough corpus for us to offer
customers subsidies on our digital
service. We will have to look at our
parent companies for supporting that.
companies will have to push aggressively
their broadband and digital services.
There is tremendous potential to strengthen
our revenues by driving growth in
DTH take away the market from cable?
There are various estimates on how
large the DTH subscriber numbers will
be. But we will know the results only
after the Test match starts. The game
has not begun yet.