An amendment to allow the complete digitisation of India's vast cable TV industry is expected to be announced this week by the government, and with it will come an anticipated increase in subscription revenue for broadcasters.
The Cable Television Networks (Regulation) Act is to be amended within days, according to an unnamed ministry official. He is quoted by Live Mint as saying: "The ordinance will amend Section 4A of the Cable TV Act that currently does not have any provision for pushing the free to air channels through the digital box."
The Ministry of Information and Broadcasting has proposed that digitisation take place in four phases, beginning in the four metros: Delhi, Mumbai, Chennai and Kolkata by March 2012. Phase 2 will, by March 2013, cover cities with populations of over one million; phase 3 will cover urban areas by November 2014; and the rest of the country will see cable digitisation by March 2015.
"We can't meet the deadline unless we amend the Act immediately," the official is quoted as saying by Live Mint.
Broadcasters expect carriage fees will be reduced as a result of digitisation, as it will address the problem of 'under declaration' by local cable operators (LCOs), where fewer cable connections are fraudulently reported to keep costs down.
In 2010 the Cable and Satellite Broadcast Association of Asia (CASBAA) estimated an annual loss of US$1.3 billion to Indian broadcasting industry through under declaration.
In a 2011 report, Screen Digest said 72% of all pay-TV subscriptions in India are to analogue cable networks, with just 3% currently receiving digital cable TV. Around 83 million homes receive analogue cable TV in India. Meanwhile, direct to home (DTH) satellite TV platforms have a quarter of the overall pay-TV market.
The government is expected to raise the foreign direct investment (FDI) threshold to 74% from 49% to enable greater investment in the cable industry, following recommendations by the Telecommunication Regulatory Authority of India (TRAI). However, cable operators are still concerned as to how they will meet the cost of full digitisation, estimated to be in the region of INR 25,000 crore.