March 2017


This month, the curtain falls on Analog Cable TV, in India. The entire country is to shift to digital CATV from April. Can this genuinely be achieved? It has taken more than 3 years, to install 70 million Cable TV STBs, to date. Compulsory digitisation in DAS Phase IV areas calls for the almost impossible task of installing an additional 70 million STBs in March 2017!

Digital Cable TV, under the old tariff structure dictated by TRAI, is just does not make business sense. No MSOs has turned a profit, and all their balance sheets are painted in red.

Hathway's books provide a telling story. The MSO's standalone ARPU (excluding tax) for Phases I, II and III stood at Rs. 105, Rs. 95 & Rs. 45 respectively. One shudders to think what DAS Phase-4 ARPUs will be, given the fact that Phase-4 is a highly fragmented rural market, with a lower capacity to pay, than even DAS Phase-3 areas.

Little wonder that few DAS licenses applications have been received to install Headends exclusively in DAS-4 territories, even though Phase-4 represents a market size equal to Phases 1, 2 & 3 put together!

In fact, MSOs have decided to shift their focus and investments away from Cable TV, to broadband. Hathway's standalone broadband ARPU is Rs. 740... more 16 times its Phase-3 Cable TV ARPU!

Semi urban and rural areas addressed as DAS Phases-3 & 4 represent low income groups that are unwilling to pay DAS tariffs. They refuse to shift to (even more expensive) DTH delivery, as has been witnessed in poor DTH gains when DAS-3 concluded.

Compulsory digitisation will force the rural poor, which represent 50% of existing Cable TV homes, to shift to Free To Air channels available on FreeDish. Ultimately, Pay Channel will lose their viewers en masse, decimating ad revenues for all pay broadcasters. The entire value chain & the pay channel industry could be severely impacted soon.