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Cable networks plan new services to meet DTH test

Cable networks plan new services to meet DTH test

Author | Source: The Economic Times | Monday, Jun 13,2005 7:45 AM

Cable networks plan new services to meet DTH test

Keen to meet the challenges of direct-to-home (DTH) services, cable networks are gearing up to offer better quality services at competitive rates. Improved technology, coupled with value-added services like pay-per-view are some benefits that may accrue to cable subscribers in the near future.

While Dish TV, the Zee group's DTH service, has already hit the market, others who have got clearance - Space TV, the Tata-STAR JV, and the Sun group's service - will also launch their services soon. Among the two, the first commercial service is expected around October after Ku-band transponders become available after the launch of the Insat-4A satellite.

However, since only one DTH service, it is believed, can be accommodated on this platform (and Space TV and Sun are both bidding for it), the service that loses out will then have to wait till June '06, when the Insat-4B is launched.

“We do not see DTH as a challenge. DTH services only flourish where cable networks are weak,” says Ashok Mansukhani, executive director of one of the largest cable networks, IN Cablenet. He points to the US where only 25% of homes have DTH services, while others have opted for cable services.

The UK, on the other hand, is a 'DTH country' where NewsCorp's BSkyB service created a media revolution by offering free set-top boxes to subscribers. DTH could prove to be a real challenge to the cable operators as it offers superior audio and video quality and dispenses with the cable operator.

“If we do not get our act together, we could lose much of our SEC A consumers,” says K Jayaraman, CEO of Hathway Cable& Datacom, another of the big-3 cable multi-system operators (MSOs).

Dish TV, the only commercial DTH service today, offers 130 channels at Rs 4,999 per subscriber per year. The service has 2.5 lakh subscribers and is adding 2,000 connections a day, claims Dish TV CEO Sunil Khanna.

After Space TV is launched, an industry projection sees subscriber numbers for DTH touching 4m or about 5% of all cable & satellite (C&S) homes by '07. This is further expected to rise to 11m subscribers by '10 or 14% of the projected C&S homes. “By '10, the DTH market is expected to be worth around Rs 4,000 crore,” predicts Mr Khanna.

Taking the DTH challenge head on, IN Cablenet will provide as many as 168 channels, says Mr Mansukhani. Of these, 120 will be free-to-air channels, while around 50-60 will be pay channels. In the case of Hathway, the network has already launched digital services in Chennai, Delhi and Mumbai, and will soon launch it in Bangalore.

The new service provides customers 130 channels through the box. The cable company is also experimenting with some additional niche channels for sports and movies, which will be available at no additional cost, says Mr Jayaraman.

Since the current last-mile cable systems can only carry 65-70 channels, IN Cable is marketing its set-top boxes at Rs 3,999 per subscriber that will allow subscribers access to all the channels. The network's current analogue feed delivers 106 channels.

Even in the case of the 65-70 channels visible on a cable-ready television set, there is a degeneration of the signal quality in 15-20 of the 'bottom' channels on the VHF band.

To rectify quality problems, the Hinduja network has imported digital plants for Delhi and Mumbai that allows digital delivery of channels till the last mile. Thereafter, the set-top box allows a subscriber access to as many as 500 channels.

IN Cable is initially marketing imported Nagra Vision set-top boxes, of which it has an inventory of about 1.5 lakh since the collapse of CAS.

Besides additional channels, the network is planning to create as many as 35-40 bouquets of channels in line with customer demand. For instance, as many as 25% of the subscribers are expected to opt for a no-frills package of just free-to-air channels. There would be other combinations of pay channels and, at the end of the high-end spectrum, a set of 40-50 exclusive premium channels.

“We are urging Telephone Regulatory Authority (TRAI) to permit a special rates for those channels introduced after October 1, '03 that are delivered through the box as well as a tariff formula for specific digital bouquets,” says Mr Mansukhani.

For the high-end customers, IN Cable is likely to launch its pay-per-view service soon after testing, and is already offering a broadband service for internet along with its regular cable service called 'Double Dhamaka'.

Tags: e4m

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