Operators lure customers with deals as cable TV digitisation deadline looms

As October 31, the deadline for the first phase of complete digitisation nears, some television distribution companies have already started rolling out new packages. Dish TV announced on Wednesday that customers could get a basic channel tier of 70 channels free of cost for life, despite the Telecom Regulatory Authority of India having recommended a minimum charge of Rs 100 per month from subscribers for the basic tier. Hathway Cable & Datacom, sticking to TRAI's directive, will offer a basic tier service package comprising free-to-air channels for Rs 100 plus taxes per month. But it has also come out with other unique packages. Hathway customers will be able to watch 176 channels comprising all their favourite categories for only Rs 160 plus taxes.
 
Dish TV's initiative is aimed only at viewers in the four metros (Mumbai, Delhi, Chennai and Kolkata) which fall under the Phase 1 of the digitization plan, but it does give it an advantage in bagging new customers.

But will low prices alone determine the future of Direct-To-Home and cable TV in India? Low price along with quality content and lots of choice is what will determine the future. Currently, even with the more than 400 channels that DTH services and cable TV providers offer, much is missing: none of them provides video on demand or any other value added services. Internationally, cable companies are one of the leading providers of not only cable TV but also broadband services, video on demand and other value added services. Unfortunately in India, cable TV is associated with poor quality TV and even if the quality of TV improves with digital cable, the consumers are not getting any additional offerings.
 
The real VOD service will start when you have a library of movies and consumers can pick and choose from it and watch what they want to when they want to. This requires tremendous downstream capacity which does not exist today. Currently, content exclusivity is also not allowed in the country so that has never been the differentiator for the DTH players unlike in the West where DTH growth is also dependent on content exclusivity.
 
Foreign players will also be attracted if fresh possibilities on the content front are allowed. Given that these are not immediately possible, the only way for DTH and cable companies to entice customers is through competitive pricing. In the initial phase, even set top box prices could be subsidised. Whether they are going to be supplied free depends more on what DTH players are offering, because this is a great opportunity for them. One should also not forget that the industry as a whole is bleeding and with an estimated Rs 25,000 crore to Rs 30,000 crore required for the entire digitization. With lowering of costs, the players will increase their subscriber base but it will still be a while before they start making profits.