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HomeArticlesInterviewsThe stage is set for Indigenous STB Manufacturing

The stage is set for Indigenous STB Manufacturing

Oct 09, 2015
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On the side lines of a Workshop organised by CEAMA on ‘Demystifying STB Manufacturing’ a Bangaluru on 08 September, ‘Cable Quest’ spoke to Ankan Biswas, Chairman, Digital Broadcast Council of CEAMA on the state of indigenous manufacturing of STBs. Here are some facts on the industry, state after four years of Digitisation.

 

CQ: What has been your experience of manufacturing STBs in India? Can we complete with rest of the world, in particular China when it comes to pricing?

Ankan: Set Top Boxes are being manufactured in India for a long time. You would remember that when Tata Sky DTH service started all their set top boxes were manufactured in India. 

Zero import duty for set top box import had created a ridiculous situation, where the components to manufacture STB attracted import duty but the completely build product was not. Number of those manufacturers who started to manufacturer STB initially stopped subsequently. 

CEAMA's persistent effort along with others corrected that inverted duty regime. Now STB attracts 10% BCD. CEAMA's effort also helped in correcting the VAT imposition for interstate transaction by through Govt. order notifying STB as part of 'Telecom Network'. 

There are number of manufacturers who presently are designing and manufacturing STB's in India which matches best of the world in both quality and price, including the  Chinese. Import from China has many problems which are gradually being recognized by the operators.


CQ:
Why has Indian manufacturing not picked up since digitization commenced in 2012? What as per you, are the main hurdles? and Why have the large MSOs kept away from locally manufactured STBs and preferred to buy imported STBs mainly from China?

Ankan: Manufacturing did pick up since the import duty correction. There were a number of manufacturers who manufactured STB's in DAS i and II . 

But in DAS I and II operators were mostly national operators who are very large in size. Most of them were corporate in culture having strong financial capability and technical knowledge. They negotiated with established foreign companies and imported very large volumes in very short time. Indian STB manufacturers ramp up was slow. The acceptance of Indian Set Top Boxes have also taken time.


CQ:
As on date what percentage of STBs installed in the country are made in India?

Ankan: As per our information 30% of the installed STB's are manufactured within India.


CQ:
Is there any company manufacturing STBs from the component level rather than assembling SKD kits.

Ankan: Most of the Indian STB companies are designing and manufacturing from components level onward. However there are some traders who are trying to assemble Chinese STB's by importing SKD kits. We have seen such effort with Doordarshan FTA STBs. These traders are trying to make fast buck mostly through under invoicing. This process of manufacturing ultimately results in very poor quality as we had experienced in DD FTA boxes. Operators who would buy these SKD boxes, would bear the brunt of such poor quality and learn through bad experience. 


CQ:
How can the government policies and regulations help increase productivity of the STB sector in the coming years?

Ankan: Deity has been very proactive in helping STB sector. It has made registration compulsory for Set Top Boxes. Any set top box whether manufactured in India or imported need to be compliant to the specifications  and go through registration process. This restricts import of poor quality set top boxes and also ensures quality of domestic STB manufacturing. This benefit both operators and also Indian STB manufacturers. 

Govt, has helped domestic manufacturers through imposition of duty differential of 10% on basic import duty. It has also taken care of the disability factor faced by domestic manufacturers, who were enduring the incidence of 12.5% VAT for interstate transfer, which imported STB's were not being charged. 

Govt. has also commissioned development of Indian Conditional Access System, which will be only available to domestic STB manufacturers for next three years at one fourth of the cost of foreign CAS. 

Government policies are making Electronics manufacturing attractive, which also includes manufacturing of Set Top Box. Already corporate companies with strong financial ability have shown interest in this sector. You are aware of Hero group's STB venture.


CQ:
So far, under the 'Make in India' initiative, what has the government done to facilitate and encourage indigenous manufacture of STBs? How much has it helped the industry in the real sense and if not, what are the reasons?

Ankan: Extension of MSIPS for further 5 years and including design and development in MSIPS incentive are very attractive to STB manufacturers, as STB manufacturing starts with very extensive design effort and incentive for next 5 years are crucial for STB industry in India at this point.  STB manufacturers should be able to en-cash opportunity of huge STB demand by taking advantage of extension and enlargement of  MSIPS.

In addition to MSIPS there are other initiatives the Govt has taken  which includes incentive for setting up of Electronics manufacturing Cluster and additional investment allowance. All these efforts from Govt. have created a  very positive environment for investment in STB manufacturing.


CQ:
Please highlight any other point that you wish to mention from the workshop point of view.

Ankan: Unlike other standard electronic products, STB is a very design intensive proprietary product which depends on the technology( CAS and Middleware) which is integrated through the design and integration process into the STB. This technology strangle hold of the foreign CAS companies was one of the basic step where potential Indian manufacturers used to stumble. Development of Indian Conditional Access which is expected to be available very soon would be one of the major advantage of the Indian STB manufacturers compared to their foreign competitors.

Manufacturing of Set Top Box like any other electronic product, depends on availability of the components. Manufacturing of the components and modules in one cluster allows the Eco system to thrive. Establishing STB Eco System Cluster using the DietY Cluster incentive could be very useful to ramp up STB production in India.

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