Scatmag.com

March 2017

DAS-4: IMPOSSIBLE TASK?


As per government dictate, analog Cable TV throughout India must shut off transmissions on 31st March 2017.

Much is said by the government on the 'success' of DAS implementation in phases 1, 2 &3. However, a closer look rings alarm bells.


THE BIGGER PICTURE

Per India's Census 2011, there were 117 million TV households.

If about 20% of Indian households have a second TV, a total of 140 million digital STBs need to be installed, to complete DAS.



140 M TV Homes Need STBs To Complete DAS


RECAP

A quick recap of DAS that is being implemented in 4 phases.

DAS PHASE-I

About 8.5 million cable STBs have been installed in Phase I cities.

As per details provided earlier by the I&B ministry, the following STBs were installed:

♣ 3.4 M STBs in Delhi,

♣ 2.6 M STBs in Mumbai,

♣ 2.2 M STBs in Kolkata and

♣ 0.35 M STBs in Chennai.

DAS PHASE-II

♣ 21.5 million STBs installed.

DAS PHASE III

♣ 40 Million STBs installed. DAS Phase-3 ended on 31st December 2016.

DAS PHASE IV

DAS Phases 1, 2 & 3 account for 70 million STBs. The highly-fragmented DAS-4 rural market is supposed to consume the remaining 70 million STB!


So Far Only 50% Of Indian TV Homes Have STBs!





HUGE CONCERNS

In approximately 3 years of DAS implementation, 70 million, or only 50% of Homes have STBs!

DAS Phase 4 consists only of rural India, where the capacity to pay for programming is low. Analog cable TV networks are installed by small entrepreneurs, on a tiny budget, providing the service to about 50 homes for less than Rs. 100 per home per month.

Digital Cable TV has been compulsorily thrust on these homes, and is clearly not economically viable, nor do these tiny networks have the technical skills to operate & maintain addressable systems and elaborate automated billing systems.

It does seem rather unrealistic to expect that in 1 month - March 2017 alone, an additional 70 million STBs will be installed in Indian homes that have television.


Few Have Applied For Licenses For DAS-4 Areas



NO DAS-4 MSOS!

Another area of concern is that the I&B ministry has received a negligible number of applications to set up digital Headends in DAS-4 territories.

Realising this precipitous situation, the I&B ministry, vide its 27 January 2017 circular declared that all registered MSOs, were now free to operate anywhere in India. This desperate move undid years of issuing area specific DAS MSO licenses. The move conceals the fact that there are practically no MSOs who have applied for a DAS license to operate in DAS- 4 territories, which account for 50% of the total Indian TV homes!


THE ECONOMICS

A recent release indicates that the government is extremely happy with DAS, since the collection of entertainment tax has increased many fold.

But the fate of the Cable TV industry is pitiable.

MSO balance sheets are deep in the red. Their only succour are the broadband revenues. Thus, MSOs have shifted their operational focus & investments away from Cable TV, to broadband. They are even restructuring their organisations, to operate cable TV as a separate entity.

Hathway - a leading MSO and wireline ISP is an excellent example.

Hathway's 0.86 M Broadband Users yielded a higher income than 12.2 M digital Cable TV homes!

CATV ARPU (excluding taxes) for Phases I, II and III stood at Rs. 105, Rs. 95 & Rs. 45 respectively.

In sharp contrast, its broadband ARPU was Rs. 740.

If DAS is unable to sustain itself in the lucrative urban markets, what can be expected in the low income rural markets?


LOOKING AHEAD

If analog Cable TV networks are forced to shut down in low income rural markets, the only choice left for viewers will be to migrate to the Free-To-Air services of FreeDish.

Both - Cable TV and DTH will lose their customers, and rural consumers will give up pay channels. Pay TV channels in turn will see their ad revenues plummet. An entire industry will be destroyed.

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