Underreporting no longer an issue with new system

The Indian cable and satellite distribution network is evolving rapidly with the advent of direct-to-home players, coupled with the implementation of the long-delayed conditional access system (CAS) Jan 1.

India currently has three DTH operators: pubcaster Doordarshan’s DD Direct Plus, Subhash Chandra’s Dish TV with about 1.4 million subscribers, and the recently launched TATA Sky, the News Corp. joint venture with Indian conglom TATA. Two more, the Sun Network’s Sun DirecTV and Reliance’s BlueMagic, have gotten the greenlight from the government and are expected to begin operations in early 2007.

Due to the lack of reliable accounting, cablers across the country underreport the number of subscribers they serve, cutting subscription payouts to broadcasters and tax revenues for the government.

Once CAS is implemented, viewers will be able to view channels only through set-top boxes. Each cabler will be allowed to access only the number of subscriptions he pays for, reducing losses due to underreporting.

Underreporting by dodgy operators, the bane of Indian broadcasters, will cease to be an issue once the new systems are in place, says Paritosh Joshi, president of distribution and advertising at Star TV India.

While set-top boxes are available to subscribers at about 999 rupees ($21.75), with a monthly fee of about $1.70 for 30 channels, DTH operators such as TATA Sky are pegging offerings at an initial set-up cost of $65.30, with a monthly subscription of $4.35 — with the hope that its digital picture quality and option of viewing channels in any available language will attract customers, says Vikram Kaushik, managing director of TATA Sky.

With a presence in more than 2,300 cities within a month of launch, TATA Sky — and indeed DTH — is proving to be a major challenge to cablers, and one they seem to be taking seriously.

“Cable operators seem to be ahead with the cable already in place in almost all of India, serving over 8 million homes. With DTH becoming serious competition, cablers will have little choice but to upgrade their cables from analog to digital. The Indian distribution scene is going to see a big step up in the coming year, maybe months even,” says Star TV’s Joshi.

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