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HomeArticlesCol KK SharmaDigital Switchover - Are we on the Right Track?
Friday, 01 June 2012 06:47

Digital Switchover - Are we on the Right Track?

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Indian cable TV industry is at a very crucial turning point, when not only it is undergoing a switchover from analog transmission to digital, it is undergoing a change in its structure as dictated by the government and the regulator. Cable Operators, who were running the industry for the last 25 years are being pushed behind the scene, leaving space to some big media houses that already enjoy large scale vertical monopolies in the business.  Considering the way digitalization is being implemented through hurriedly drafted regulations, without any consideration for thousands of LCOs threatened with unemployment and millions of subscribers who cannot afford the STBs and the Pay Channels, industry is definitely being pushed into a chaotic situation by the incumbent bureaucracy. What USA and Europe could not achieve in 12 years, we are trying to achieve in three years ignoring the fact that our economy is in shambles, GDP has come down to 6.5, number of poor is growing every year, power and food shortage is perennial and we have no adequate manufacturing infrastructure in place.  

This article discusses the political, economic, technological and human aspects of the digital switchover and analyses the ways, how we are going wrong. It can ultimately affect our economy adversely because underdeveloped cable sector means low broadband penetration.



Ministry's only aim appears to be to make every pay channel reach the consumer even if the last mile infrastructure is not in place for them. Not only this, in the army parlance it has an 'aim plus'; to handover maximum subscribers to DTH operators, declaring an analog blackout as soon as possible.

Social Issues. To ensure every existing analog customer can afford digital services, increase learning and awareness and minimum disruption after analog switch off. No televisions should go blank overnight.

Political Issues. Include securing the business of existing stake holders, controlling cross- media holdings and vertical monopolies and ensure no violations of Competition Laws (already one complaint on media cartelization is pending in CCI). 

Economic Issues. This include efficient spectrum usage (in case of terrestrial analog TVlike Doordarshan, better broadband penetration (on cable networks) and  financial support to the industry like subsidy on STBs, exemption of taxes and duties etc.

Technology Issues. Market driven approach is preferred than government driven. It should ensure portability and mobility, availability of STBs and equipment within the country, standards and encourage indigenous production, technical training and technical support.

All the above have been overlooked in setting the deadlines and implementing the law as none of the prerequisites as recommended by TRAI in 2010 have been completed. Ministry's only aim appears to be to make every pay channel reach the consumer even if the last mile infrastructure is not in place for them. Not only this, in the army parlance it has an 'aim plus'; to handover maximum subscribers to DTH operators, declaring an analog blackout as soon as possible, during the chaos that follows this blackout. I am sure it will defer the deadlines once it finds that not many subscribers are rushing for DTH. 

At least this is what is indicated by full page newspaper ads by some DTH operators and advertisements on TV channels duly approved by the Ministry in which they talk about the goodness of Digital TV and ask the consumers to approach a digital cable operator or a DTH operator for a digital connection. One wonders if we are doing digitalization of cable or promoting DTH.

Ministry officials have given a clear message during their interaction with the cable industry that small scale industry of cable networks (Recognised in1994) employing millions of people in urban as well as rural areas must shut shop if it cannot obey the manipulated amendment to Cable TV Act and abide by the unrealistic deadlines to go Digital.

Even the Parliament was mislead when I&B Minister replied to a question on adverse effect of the new law on employment of thousands of small operators that HITS technology will protect small operators, when in reality no HITS exist on ground. 

Worldwide Digital Wave

Digital 'switchover' is defined as the progressive migration of households, from analogue-only reception to digital reception. 'Analogue turn-off' or 'switch-off' refers to the termination of analogue broadcasting, which is considered to be possible when most households are equipped to receive digital signals.

No doubt, digital switchover has been put high on the agenda of many countries in recent years. USA, UK and European Countries started implementing Digitalisation in 1999 onwards and are at the fag end of the process. South Afrika, China, Singapore have also taken the initiative. Japan and Korea finished it already. In India too we started working in 2006, Planning Commission in India constituted a sub group for Digitalising the broadcasting sector but the real action had started in India in 2003 when CAS law was cleared. Many large MSOs had installed Digital headends and started giving pay channels in encrypted form so that there was transparency and accountability of pay channel revenue. Unfortunately, bad politics, lack of understanding of the market as will as technology on the part of the bureaucrats and pressure from pay broadcasters lead to the death of addressability in India till the Delhi High Court directed the government in 2006 to implement it as planned starting with selected areas of metros. 

This lackadaisical approach de-motivated the industry in switching over to digital networks as regulatory support was missing. Pay channel broadcasters did not want addressability because they would have lost tremendous viewership if consumers started exercising their right to choose what they wanted to see. Ministry gave up to the wishes of broadcasters and handed over the regulatory process to TRAI in 2004. It was perhaps done as a delay tactics to stop addressability in cable and let broadcasters reach direct to the subscribers with other technologies like DTH, IPTV and Mobile TV which were cleared by TRAI in a few months leaving Cable operators to the mercy of these broadcaster cartels to be exploited. More than 30 recommendations of TRAI on cable TV are lying in the cold storage in the Ministry. 

Now, after eight years, DTH has reached its zenith and its progress has slowed down because it has to fight a tough competition in the cities with analog cable. It could get a good hold only in rural and cable dry areas. The best way to finish analog cable competition was to finish it off permanently using the regulatory route, much the same way CAS was deferred indefinitely. Ministry has agreed to oblige the broadcasters once again hurrying up with the DAS regulations and cutting down the switchover time to six months in the metros, one year in TAM cities and three years in rest of India. 


Digitalisation is a National Issue and cannot be Forced

The issue is a National one where political, economic, technological and human aspects of the digital switchover are considered before making policies. This does not appear to have happened in India. Ministry has taken it as its personal agenda because government is in no position to provide any incentives to the industry or the consumers and has rejected all proposals of the Ministry. In fact, I&B Ministry cannot force a technology on people and ask them to invest heavily in the name of good picture and stereophonic sound or video-on-demand etc., when subscribers have not demanded it. It amounts to curtailing their fundamental rights and making millions unemployed. To make it more difficult for these cable operators, TRAI has made it mandatory to provide minimum of 500 channels. The best part is that it is the Ministry officials who are suggesting consumers to take DTH connections if their cable operator is unable to provide digital signal after the sunset date.

Private entrepreneurs adopt new technologies to provide better services efficiently, increase their ARPU and earn more profits. In this case by equating a nationwide DTH operation run by a multinational with a small cable operator serving a colony of a few hundred or thousand households is like killing one industry to benefit another, 

Digital 'switchover' is defined as the progressive migration of households, from analogue-only reception to digital reception. 'Analogue turn-off' or 'switch-off' refers to the termination of analogue broadcasting, which is considered to be possible when most households are equipped to receive digital signals. In most of the countries where analog switch off is being practiced, it means termination of terrestrial transmission of analogue television, whereas 'switchover' refers to the transition from analogue to digital broadcasting of all networks including terrestrial, cable, satellite and DSL (digital subscriber lines). 


Social acceptability of switchover is a public duty to be fulfilled by the state.

Digital switchover is largely seen as an inevitable result of technological progress. It is an unpopular policy that people often see as coercive. This is partly because the governments' rationale and motives for switchover are not entirely understood and trusted, and partly because people think analogue television will be 'taken away' and therefore they will have to incur costs to be able to continue to watch television. 

In fact, large parts of the population see little or no reason to adopt digital television (DTV). Research undertaken by many countries found that for some people DTV is too confusing or just too difficult to use. For others, converting their television sets seems to incur a significant financial investment that they are not prepared to take. There are also millions of viewers who are simply satisfied with the programming available on the analogue channels and who do not see the merits of the multi-channel era. This is the reason that despite the entry of a number of DTH players, IPTV operators and Digital cable networks, analog cable takes a lion's share. 

In India, people are not even aware that they watch 'pay' channels for which they will have to pay once the analog is switched off. Also, many free-to-air cable networks attract large audiences.


Advantages of a Digital Switchover

Completing the switch to digital will bring significant benefits both to consumers and broadcasters. National economies as a whole are also expected to benefit. More specifically, digital broadcasting brings-

Increased choice and quality for viewers (as there will be more channels and the opportunity to provide a better image, including wide-screen aspect ratio, high definition and sound quality);

Lower transaction costs or the ability to transmit more channels or services for the same cost. Broadcasters will no longer have to incur the costs of transmitting signals in both formats (simulcasting), releasing sources for investment in programming and other services for consumers;

Switching off analog terrestrial transmissions of Doordarshan will bring better efficiency in spectrum use (as more data can be transmitted within the same bandwidth). Spectrum will be released to allow the development of more television and other services for consumers. Digital terrestrial television signals are also expected to reach the population who live in areas that cannot currently receive them because of spectrum limitation;

The ability to transmit associated data allowing for enhanced television or fully interactive applications when associated with a return-path facility.


Drawbacks of Digital Switchover

Alongside these tremendous economic and social benefits, the analogue switch-off entails drawbacks, 

  • It may result in social exclusion insofar as DTV is unavailable to some parts of the population. Most countries have taken measures to ensure that certain criteria of availability and affordability are satisfied as part of their strategy for analogue switch-off. For example, in some countries a 'digitalization fund' has been created as a support measure. The resources from the fund may be used for various purposes, including assisting consumers who are unable to afford the end-user equipment in the final switchover phase. In some cases like in the US, South Africa and Italy heavy government subsidy is provided for set-top boxes. A key issue for a successful switchover was affordability for all homes regardless of income. British government's objective, first announced in September 1999, is to achieve full switchover from analogue to digital only when the following tests are satisfied :
  1. To ensure that everyone existing analog subscriber can receive the service on digital systems.
  2. To ensure that switching over is affordable for the vast majority.
  3. To ensure that 95 percent of consumers have access to digital equipment. Ions
  • It has been observed in other countries that the take-up of DTV services was then relatively high in the beginning, but the initial high rate was not maintained as digital television failed to meet some customers' expectations. This has happened in the DTH sector in India. Six DTH players with deep pockets have been able to connect only 45 million STBs where one third is inactive. People get lured of the initial entry schemes but get disappointed and leave. Reasons may be -
    • Picture freezing during rains.
    • Many cable TV consumers in the cities have a DTH connection only as an alternative. 
    • All DTH players are broadcasters with many channels of their own. They must have these channels on their network, whether there is a demand or not. 
    • Prepaid consumers land up getting unwanted deductions as it happens in prepaid mobile services. 


The Free-to-Air Model

In all countries where digitalization has been implemented, it has started from Free to Air services of Public Broadcaster. Digital pay-TV services have a limited uptake. In a highly competitive digital pay-TV market like Britain, about 37 percent of homes had taken up digital television by 2002, leaving more than 60 percent of homes unconvinced. Attention was focused on the free-to-view market and with the launch of the BBC led Freeview service in September 2002, DTT in Britain has turned into a free-to-air only platform.

The subscription-free scheme helped to rebuild public confidence in DTV. Since the launch of Freeview, DTV has become considerably more affordable as competition between manufacturers and retailers of Freeview receivers resulted in significant price reductions. Perhaps more importantly, Freeview appeals to those who reject satellite and cable pay-TV services. 

In particular, the findings suggest that many of Freeview's customers are affluent, older people who have no interest in purchasing satellite or cable pay-TV services. The fact that the free-to-air package includes far fewer available channels (about 30 compared to over 200 from BSkyB) made no difference to this group. 


India is not a Pay TV Market

There are also millions of viewers who are simply satisfied with the programming available on the analogue channels and who do not see the merits of the multi-channel era. This is the reason that despite the entry of a number of DTH players, IPTV operators and Digital cable networks, analog cable takes a lion's share.

Indian Consumers have always rejected pay channels. In analog cable TV, consumers pay only a lump sum amount every month to watch a fixed number of channels. I doubt if the consumer knows what he is paying for Star TV or Discovery. It is only the cable operator who is being forced to pay for these pay channels.  Unfortunately, the Ministry has even changed the definition of a “Pay Channel', as the one for which a cable operator pays to a broadcaster whereas all over the world, pay channels are considered those channels which the consumer chooses to view and pay for them.

Even on DTH service, operators avoided giving a-la-carte choice to consumers because there were not many takers. Also, most of the subscribers of DTH demand only a basic package, which comprises of mostly Free to Air Channels and they pay Rs 150/- as subscription. This has kept the DTH ARPUs low resulting in all DTH operators cribbing about losses. 

Setting a date for analogue switch-off is not the only means of encouraging early DTV adoption. Subsidizing the relevant equipment to receive DTV (integrated television sets, set-top boxes), giving incentives to operators who go fully digital and helping LCOs to become a part of the National Broadband infrastructure may also prove compelling. For example, BSkyB in Britain has played a significant role in making DTV more affordable as it continues to subsidize digital set-top boxes, offering them for free to new subscribers. Cable operators also offer incentives to convert to digital as customers can access telephony, DTV services and broadband Internet with a single subscription. Apart from the direct, spontaneous actions from market players, another option would be for the government to help subsidize the cost of set-top boxes. 

The Government resources could be used for the following purposes:
  • To co-finance pilot trials or research projects;
  • To develop programmes and additional services with 'digital added value';
  • To raise public awareness on digital transmission;
  • To assist infrastructure operators and broadcasting companies to manage the simulcast phase (the phase in which channels continue transmitting in both analogue and digital modes to reach all viewers, as part of their public service remit until analogue switch-off);
  • To assist consumers who cannot afford the end-user equipment.
  • In addition to funding, active management is required to complete switchover effectively. 



In sum, both government and industry must work together if switchover is to be achieved with the set timeframe. If left entirely to the market, the BBC predicts that it will take until 2013 for 95 percent of British households to have DTV, for example Paris-based research firm BIPE also considers that if left to the market the switch to digital is likely to happen at a moderate speed, which will be determined by transmission and switching costs (such as the upgrade of networks to support digital broadcasting; or the equipment of every household with digital compliant receivers). 

Of course, it might be unwise to put in place a rapid implementation of digital switchover when markets and television services are still in the process of consolidation. Clearly though, analogue switch-off should not be left to the unpredictable outcome of market forces at an unpredictable date in the future. Some form of national public policy intervention will be required to create the necessary conditions for a successful switchover process. Governments should also reserve intervention for the final stages of turn-off in order to ensure that the minority of homes that have not gone digital are given economic incentives (perhaps by subsidizing equipment) to encourage conversion.

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