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| HITS to hurt biz: Cable operators |
| Ashish Sinha / New Delhi Nov 22, 2009, 00:02 IST |
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Say may have to sell out as new policy gives no sops for upgrading technology.
With no incentive to upgrade their analogue cable networks, around 2 million people working in the cable television industry may be hit by Headend-in-the-Sky (HITS), a satellite-based cable delivery service, according to the Cable Operators Federation of India (COFI), the apex body of major cable operators in the country. There are close to 60,000 cable operators in the country covering 85 million homes.
Last week, the Union Cabinet had approved rollout of HITS. This will allow use of satellites to distribute cable signals instead of the traditional cables that these operators use. This is similar to the Direct-to-Home (DTH) system, the only difference being that in this case, cable operators will download signals for further distribution in homes.
According to the COFI, the HITS policy is discriminatory and hits the livelihood of cable operators. “HITS gives incentives to organised media companies to take their services to cable operators whereas there are no incentives for cable operators for upgrading networks to take signals to consumers in the best possible manner,” it said.
The HITS policy allows 74 per cent foreign direct investment (FDI) while FDI in cable companies is capped at 49 per cent.
“The policy will help a few media conglomerates who already own channels, multi-system operator (MSO) networks, DTH platforms, IPTV. This will make them grow vertically as well as horizontally to create monopolies in the market,” said Roop Sharma, president of the COFI. The Ministry of Information and Broadcasting says HITS will enable faster digitalisation of cable services, especially in rural areas, making them more affordable.
But cable operators say they will require a minimum investment of Rs 3-4 lakh to buy infrastructure to receive HITS signals. Otherwise, they will be forced to sell out to the HITS licensee, they say. “A majority of cable operators provide services to 300-500 homes on an average. They don’t have the money to upgrade. We will be forced to become an employee of HITS operators or shut shop. The policy does not talk about us at all,” said Ravinder Sharma, a cable operator in West Delhi.
Even a section of MSOs feels HITS may not find takers. “The supply chain, starting from transmission of cable signals in the digital format to end-consumption via set top-boxes, needs to be linked in order to make HITS a success, something the policy does not talk about. The HITS operator should be willing to take a financial hit in order to promote HITS, which no major operator is in a position to do,” said a top executive of a leading MSO.
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