French Technology Highlights at BES EXPO 2012 New Delhi – 11 to 13 February 2012
BES Expo 2012, International Conference and Exhibition on Terrestrial & Satellite Broadcasting, was organized by the Broadcast Engineering Society of India from 11th to 13th February 2012 at Pragati Maidan, New Delhi.
The event hosted a French Pavilion, organized by UBIFRANCE, French agency for international development, bringing together leading companies from the French broadcast industry.
The French companies showcased their high-tech broadcast solutions and met leading players and decision makers from the Indian broadcast industry.
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CHANNEL UPDATE - MAY 2012
Contents
MAY-2012
FOCUS
Head-End in the Sky
A Digital Revolution
Headend in the Sky (HITS) is Comcast's satellite multiplex service that provides cable channels to cable television operations. At a traditional cable television headend, multitudes of satellite dishes and antennas are used to grab cable stations from dozens of communication satellites. In contrast, HITS combines cable stations into multiplex signals on just a few satellites; cable television companies can then pull in hundreds of channels at the local headend with relatively little equipment; the HITS feed effectively replaces the more complex traditional headend operations.
It is expected to change the way digital broadcasting is implemented in whole world. It will provide digitally compressed programming via satellite with a uniform encryption system using a single headend. This will bring a paradigm shift in the way broadcasting signals have traditionally been transmitted and help decrease the divide between urban and rural digitization of broadcasting signals, especially in the non conditional access system areas of the country. The present bulletin discusses the HITS technology, its possible impact on the broadcasting and digital network across India and the legal approvals and pre-requisites to be fulfilled before acquiring a HITS license.
In India, The Telecom Regulatory Authority of India (“TRAI”), on the request of The Ministry of Information and Broadcasting (“MIB”) has formulated the much awaited guidelines (“Guidelines”) for grant of permission to establish and operate Head-end-in-the- Sky (“HITS”) broadcasting service from India. These Guidelines were passed pursuant to the Union Cabinet decision dated November 12, 2009.
A giant leap for mankind?
HITS is a multi channel downlinking, distribution and transmission technology that enables all pay channels to be downlinked at a central facility and then again be uploaded by the HITS operators to its satellite after the encryption of channels. These signals are then downlinked by various Multi System Operators (“MSOs”) and Local Cable Operators (“LCOs”) using a single satellite antenna and sent to the customers/subscribers, who can view these pay channels by using their set-top box. HITS services are allowed in both C Band and Ku-Band2 and uplinking is permitted to both Indian as well as foreign satellites.
The diagram below illustrates how the HITS technology is used:
Beneficiation of Indian HITS license
HITS, as compared to other forms of digital broadcasting, is a more cost-effective method of achieving digitization since it doesn’t require heavy investment from the cable operator, who merely has to equip homes with set-top boxes and become a franchisee. There are certain distinct advantages a HITS licensee has, namely:
1. The licensed HITS operator is allowed to directly contract with various broadcasters for buying their content.
2. He can also put all the broadcasting content at one place (hub/teleport) and then uplink it, using his own encryption, to a satellite hired by him. This uplinked content is then available to the LCOs for downlinking, by using a dish antenna, and is then distributed to the television homes. Such a system allows the HITS operator to work like a conventional MSO except that the head-end is in the sky instead of being located on the ground.
3. The HITS operator can provide infrastructure facilities as well.
4. The licensed operator can also provide simulcrypting/multicrypting of channels aggregated by different MSOs with different encryption systems to one or more MSOs who wish to uplink these channels to a HITS satellite and then downlink them for transmission to the consumers. This allows the HITS operator to avoid contracting with the various broadcasters for content and the operator can simply enter into a contract with one or more MSOs or cable operators who wish to uplink their aggregated channels to the HITS satellite.
Eligibility for HITS Providers
There are certain pre-requisites that have to be complied with before a company is granted a HITS license. The company seeking a license should be a company incorporated under the Companies Act, 1956 and comply with the following terms:
a) The company has to obtain a prior permission from the MIB and a wireless operational license (“WOL”) from the Wireless Planning and Coordination Wing (“WPC”) of the Ministry of Communications and Information Technology. Once granted, the permission will be valid for a period of ten years from the date of issue of the WOL.
b) The net worth of the company should be INR 100,000,000 and the same has to be certified by the statutory auditor of the company.
c) The total foreign direct investment (“FDI”) in the company must not be more than 74% at the time of application and during the period of permission. Prior approval is required from the Foreign Investment Promotion Board for any FDI in excess of 49%. This will further encourage foreign participants to invest in the Indian broadcasting transmission industry.
d) Any broadcasting or DTH company will not be allowed to hold or own more than 20% of the total paid up capital in the company holding the HITS license. Simultaneously, the HITS permission holder cannot hold more than 20% equity in a broadcasting or DTH company. Additionally, any person or company holding more than 20% equity in a broadcasting of DTH company, cannot hold more than 20% equity in a company having HITS permission, and vice versa. This will ensure that there is no vertical integration amongst these companies and to promote competition amongst the market players. Such cross media holding restriction will not apply to financial institutional investors, or MSO/cable operator companies.
Cable TV Digitization
A Boost for the Industry & Consumer
For consumers, digitization implies better choice and quality of television viewing. Digitization of cable and satellite broadcasting is now being taken up in earnest with plans to complete the nation wide roll-out by December 2014. As the drive gains momentum, other relevant issues that have been pushed under the carpet are slowly coming into the open. One such issue is the non-compliance of most television channels with existing norms.
Digitization will result in more accountability and more advertising revenues, says Vikram Kaushik MD, Tata Sky. When we talk of Pay TV we are talking of Cable TV, DTH, IPTV and HITS. First and foremost thing is digitization is inevitable. It has begun, arrived and it is inevitable. We heard for the first time from TRAI that the Government is looking at a date for the switch over as near as December 2013.
The introduction of mandatory cable television (TV) digitization in India would improve business profile of multi-system operators (MSOs) over the medium- to long-term, driven by improved transparency through accurate reporting of subscriber base. This in turn will provide greater comfort to investors to provide capital to this sector. The greater transparency will also improve broadcasters' revenues as they may negotiate for a better price. However, the proposed mandatory digitisation, which is presently awaiting parliamentary approval, will require significant capex to develop digital infrastructure. This will involve significant investments in digital set-top boxes, based on the total estimated analog subscriber base of 68 to 67 million.
It is primarily due to the current industry practice wherein the cost of a set-top box is heavily subsidized by MSOs. Nevertheless, some comfort is drawn from the Telecom Regulatory Authority of India's recommendation for a phased implementation of digitisation. Also, MSOs (like Hathway Cable & Datacom Ltd) who have voluntarily started the digitisation process, to better manage the overall execution and financial risks compared with peers, especially during the first phase of digitisation wherein the subscriber base and capex requirements are low. The expected improvement in business profile of MSOs would outweigh any financial risks stemming from large debt-funded capex in the short-term. Fitch also expects that mandatory digitisation will provide opportunities for consolidation in the cable industry.
Furthermore, it may change the existing subscription revenue sharing mechanism between various stakeholders in the cable industry (broadcasters, MSOs and LCOs), which in Fitch's opinion should benefit MSOs. However, carriage and placement revenues of MSOs may come under pressure. In addition that mandatory digitisation would better equip the cable TV distribution industry to compete with the direct-to-home (DTH) companies at competitive prices. Also, MSOs' ability to offer additional services, like internet broadband services, using a common infrastructure will improve their operational leverage and help generate additional cash flows.
Digitization is inevitable
First and foremost thing is digitization is inevitable. You watch TV at home as it is beamed down by satellites either to the cable head ends or to the DTH systems uplink facility. For this to happen, spectrum is utilized. India is chronically deficient in the amount of spectrum available to it. This is not something that is going to change dramatically. There is limited spectrum and as a result of it for the last 25-years you could not watch more than 60 or 70 channels. And now through our DTH channels typically you can watch around 200 channels. There are already 500 registered channels in the country. And the reason you cannot get more is there is not just more transponder capacity for the platforms to give you more content. The availability of spectrum availability is the compelling reason, digitization is inevitable and we cannot do without it. On the ground digitization is inevitable because you cannot have such a large country with 1.3 billion people with a 125 million TV sets, growing at 15 per cent and still reaching only half the population. You cannot have a situation that the entire activity and the money generated from it at around Rs 200 per household, per month, not a bit is seen by the regular economy.
This money is collected in cash from people’s homes every month. It is the largest cash collection system in the world. It is collected in cash, not a rupee is paid in tax. Broadcasters are paid Rs 2 of the Rs 10 collected – just 20 per cent declaration. And everybody in the value chain just fends for themselves. This is the largest source of black money in the country. Everybody must declare and pay legitimately so that this money can be shared among the value chain legitimately.
Spectrum utilization is the first imperative. Addressability and removing distortions from the system is the second. And there is a third important reason why digitization is inevitable. And that is the promotion of choice. Consumers must have choice. Why should I sitting in my home, be forced to watch five channels in South Indian languages which I respect a great deal but I cannot understand a word of it? And vice versa, living in Chennai be forced to watch Bhojpuri, Nepalese, Punjabi and Bengali channels? The other reason why digitization is critical is the digital systems will make available and do make available choice. The second is the sheer size of this business. It is estimated that roughly half the population in India is exposed to television. And another 600 million people still need to come.
Benefits of Digitization
• Boost priority - A boost for the government and the economy. If the current analog cable distribution model remains in place and digital penetration is limited, the cumulative value of the tax receipts lost by the government would reach US$11 billion over the next decade or >US$1 bil. per year. The government therefore has sufficient incentives to push digitization and can also accelerate the process by offering tax incentives to a potential multi-billion-dollar industry. Digitization will also help the government pursue India’s broadband goals and thereby help to boost economic growth. Potentially, a 10% increase in broadband penetration would increase India’s GDP by ~1.5%. As of September 2011, broadband per capita penetration in India was only 1%. In its National Broadband Plan, the Telecom Regulatory Authority of India sees a pivotal role for cable operators with digital network upgrades paving the way for broadband growth.
• Consumer choice - Digital cable TV will improve the consumer experience and resolve legacy issues from analog cable services. Consumers will gain access to (1) More TV channels; 2) Attractive tiering options with differentiated content across local, regional and niche genres; (3) A better viewing experience; and (4) Improved quality of service. Digital cable TV will also be affordable for the consumer. As per international benchmarks, spending on pay-TV typically accounts for ~5% of GDP per capita. In this context, digital cable TV in India will be affordable given heavy subsidies on STBs (currently subsidized at ~60-70% by MSOs), which will ensure that consumer spends fall within the 5% benchmark. Consumers will also benefit from new competition as digitization in metros ensures that seven DTH satellite platforms (including free service DD Direct) compete for customers with digital cable operators.
• A cable transformation. - a 6x increase in subscriber revenues for cable MSOs though not without at least a 20% churn in the cable subs base to DTH. Subscriber declaration levels will increase from 15% currently to 100%, while the retained ARPU will increase by 6x, after assuming a 30% base case revenue share with the local cable operator (LCO). Additional drivers and differentiators will come from bundled broadband and high-definition (HD) services. Broadband will reduce the payback period on digitization; under a bundled model, the payback period could be reduced by a year to 24 months, as opposed to 36 months under a standalone digital proposition. The main challenges, apart from managing subscriber churn to DTH, are: (1) Carriage and placement (C&P) fees will drop by about 20–50%; and (2) Incentivizing revenue-sharing agreements have to be struck with LCOs in order to drive digital into the home.
Most viewers seem to prefer direct-to-home (DTH) to view television. However, cable (digital) will still be an important broadcast mode. This observation has been made by a FICCI-KPMG report on media and entertainment.
The number of DTH households in the country is set to go up from 37 million in 2011 to 86 million by 2016.
Digital cable, on the other hand, would see its subscriber base explode from 6 million to 75 million over the same period.
Not surprisingly, analog cable, which connects most households currently, would shrink from 68 million in 2011 to just 4 million by 2016.
A major reason for these trends is the fact that the telecom regulator (TRAI) has mandated compulsory digitisation of analog cables across the country. The four metros will have to finish this process by June 2012. As many as 37 cities will have to digitise by March 2013. The rest of India will have to follow suit by December 2014.
This means that a subscriber, currently on the normal analog cable system with no set-top box, has two choices. First, to move to a digital cable operator who provides a set-top box and a fresh cable system. The other option is to move to a DTH player. The regulator made these moves to check the rampant under-reporting of revenues by local cable operators (LCOs) under the current analog cable system. This causes huge revenue loss to broadcasters and potentially lost tax revenues to the government.
Potential subscribers
Dish TV, the largest DTH operator in the country, estimates that by March 2013, potentially 27 million subscribers would be up for acquisition by service providers. Both the DTH and digital cable network providers would be vying for the opportunity.
The DTH market has six players with the prominent ones being Tata Sky, Airtel Digital TV and Sun Direct. Videocon and Reliance Big TV have smaller market shares.
The digital cable market has just two players — Hathway Cable and Den Networks — which have presence in several states in India. There are some regional players such as SCV. That digital cable would provide significant competition is also evident from Dish TV's and Airtel Digital TV's reported numbers. Subscriber additions which were in excess of one million a quarter, a year ago, is down to 3-4.5 lakh over the past two quarters.
ARPU expansion
The other key aspect about digitisation is the substantial increase in average revenue per user (ARPU) that is possible through this mode. The likes of Dish TV and Airtel Digital TV generate ARPUs of Rs 152-160. The FICCI-KPMG report estimates ARPUs for DTH players to increase from Rs 160 to Rs 253 by 2016.
In the same vein, the same ARPU is also predicted for digital cable players as both would target the same subscriber base.
Subscriber acquisition costs vary from Rs 2,200-3,000 across the industry on account of expensive set-top boxes. So operators — DTH and digital cable — would be hard-pressed to undercut.
Indians’ Rising Appetite for
Mobile App. Development
Be it playing Angry Birds or watching movies on the go, a rise in the number of low-cost smartphones has enabled young Indians to access mobile applications like never before. According to search engine giant Google, around 40 million Indians access the Internet through their mobile phones and there are 30 million apps download in one week. A combined survey by global market research firm IPSOS and Google found the 18-29 age-group using smartphones the most. "Availability of smart and feature-rich phones at low cost, low telecom tariffs and flexibility of accessing the services on the go have made mobile apps all the more popular in a price sensitive country like India," Amit Sachdeva, partner, business advisory firm Ernst & Young (E&Y), told IANS. According to Sachdeva, the most popular apps in India are the entertainment apps such as games, music and Bollywood followed by social networking and utility services that include paying off electricity bills and job search.
Indian market at a glance
Low-cost smartphones in the Indian market are available at a price as low as Rs.5, 000. Launch of 3G services has become an added advantage. The sector will witness a boom once 4G and LTE (long term evolution) services are launched as well. Mobile "apps" are functional programmes installed on phones and tablet devices, and range from games such as the famous Angry Birds to messaging services such as WhatsApp messenger, travel guides and online newspapers. Usually they're downloaded onto your mobile phone through the internet, but in India millions can't access the web through their phones, which is where this shop, Mobiworld, spotted a gap in the market.
The e-commerce segment is fast gaining popularity with services. Deals and discounts are being accepted across the country. And mobile banking, which has a long way to go owing to security concerns, would soon draw customers in large numbers, he said. Data collated by IT research firm CyberMedia showed the smartphone sales in India surged 87 percent at 11.2 million units in 2011 over the previous year as almost 150 models were launched by more than 30 vendors. Unlike earlier days when pre-loaded apps like social media and music applications were mostly used, people are now buying games, said Virat Khutal, chief operating officer, mobile apps development firm Twist Mobile.
Instead of spending Rs.150 or more in buying tickets for a movie which would end in three hours, youngsters these days think why not buy an app which would be available with you all the time even while you are on the move, said Khutal. According to Ditto TV, a Zee Group company which earlier this week launched its services in India, there has been a paradigm shift in the way Indians consume information. "The need to be mobile has become an indispensable one and the role of internet-enabled devices paramount," said Vishal Malhotra, business head, New Media, Zee Business Enterprises. "We are seeing a substantial response to mobile devices that allow users to have access anywhere, anytime. This has spurred the growth of applications which has developed into a full-fledged market," he told IANS. The firm is bullish about the Indian apps market and is planning to tap an audience ready for entertainment on the go. "We are looking at a subscriber base of one million users by the end of our first year," Malhotra said.
Ditto TV provides live channel-agnostic TV content and would soon incorporate features such as catch-up TV by which users will be able to share information related to shows, content that they like.
Investors eyeing on mobile app development
"People want to access more applications on their mobile phones, but GPRS connections can be slow or nonexistent in India, so it's just not possible," says Partha Chaudhari from Onward Mobility, the company behind Mobiworld. At Mobiworld, customers owning smartphones can get mobile applications downloaded onto their phone via Bluetooth and a secure SMS code. A member of staff is on hand to help you through the process. Mr Chaudhari says this method appeals to a large number of Indian consumers who like personal service and like to "touch and feel" a product before they buy it. He admits the range of apps his store offers, nine currently, is minute when compared with the thousands of applications which can be purchased over the internet through the iTunes, Android or Nokia stores, for example, but says they plan to expand their range in the coming months.
'Ready to invest'
Getting a foothold into the Indian apps business is seen as a lucrative move by many in India. The cover of a recent issue of the Indian magazine Businessworld asked whether the Indian app business would be the next big model for entrepreneurs to make money. In a cramped office in the Ville Parle area of Mumbai are the offices of Spiel Studios.
The Impact of Digitisation
Across the Pay-TV Value Chain in India
The government-mandated digitalisation of cable TV in India will affect more than 88 million households, and forever change the way revenue is split across the pay-TV value chain.
The Television Networks (Regulation) Amendment Bill of 2011 enshrines in law the Indian government's goal of moving all analogue broadcasting to digital signals. The process will be implemented in a series of phases, but the bill's 'sunset clause' stipulates the total switch-off of analogue signals by the end of 2014. By that time, the 88 million households estimated to be receiving analogue cable-TV services will have to be moved onto digital platforms.
The pay-TV value chain in India has three main elements (see Figure):
Broadcasters on one side
Distributors in the middle – consisting of a combination of multi-system operators (MSOs) and local cable operators (LCOs) on the cable side, and direct-to-home (DTH) players on the satellite side
Customers at the end of the value chain.
Most players will benefit from the digitisation process (with the sole exception of LCOs), though the extent of benefit and the execution challenges faced will vary.
End customers will enjoy greater choice, and at not much greater prices
Customers will benefit in terms of:
Greater number of channels available
Improved picture quality
Choosing and paying only for those channels that they actually want (a more 'a-la-carte' approach)
Access to value-added products and services, such as digital video recorders (DVRs), premium VoD and so on.
Finally, driven by demand dynamics and high competition, the price that the customer will pay for all of these better, additional choices and features is not expected to be drastically higher than the current price of analogue cable TV.
Complete transparency
In the current scenario, LCOs are required to report the number of subscribers for which they provide last-mile access to the MSOs, for revenue-sharing purposes. However, the lack of digital systems (and hence lack of transparency) allows LCOs to significantly under-report subscriber numbers. Current estimates are that LCOs declare only 20% of their actual subscriber volumes for revenue-sharing and tax purposes. Digitisation will create complete transparency and end this discrepancy.
MSOs will reap the greatest benefits ... and bear most of the challenges
In terms of subscribers, MSOs will get a share of revenue from a significantly larger volume of subscribers (as LCOs will be unable to under-report). In terms of ARPU, they will see an upside because of:
Subscribers consuming and paying for value-add services, such as high-definition channels and VoD the opportunity to bundle broadband to some digital customers.
The former is expected to increase ARPU rates from INR150 per month to about INR180 per month. Broadband bundling could increase this to INR220.
TRAI Recommends on Auction of Spectrum
Industry Unhappy Over Recommendations
TRAI released its recommendations on auction of spectrum on April 23, 2012. The recommendations are in pursuance of the Supreme Court order cancelling 122 telecom licences. The cancellation was ordered on grounds of procedural irregularities and arbitrariness in the first-cum-first-serve policy for allocation of spectrum. The recommendations, if adopted by the Department of Telecommunications, would change various aspects of the present telecom policy, including (a) relationship between a telecom licence and spectrum; (b) procedure for allocation of spectrum; (c) pricing of spectrum; (d) limits on spectrum allocation; and (e) use of spectrum.
Relationship between telecom licences and spectrum
Previously, under the Telecom Policy 1994 (updated in 1999), spectrum was tied in with telecom licences. Since 2003, licence conditions provided for award of two blocks of 6.2 MHz of spectrum for GSM technology and two blocks of 5 MHz for CDMA technology. As per the government’s decision of January 17, 2008 (as explained in TRAI’s consultation paper, see page 3 paragraph 7) additional spectrum would be awarded on the basis of increment in the number of subscribers. Service providers had to pay a licence fee (on obtaining the licence), an annual licence fee and a spectrum usage charge determined on the basis of their adjusted gross revenue.
TRAI has recommended that telecom licences and spectrum should be de-linked. The service provider would thus pay separately for the value of the licence and the spectrum. With this formulation an entity that does not hold a licence, but is eligible to secure one, may also procure spectrum. This would help in avoiding situations where licence holders have to wait to secure spectrum or offer wire line services in the absence of spectrum.
Procedure for allocation of spectrum
TRAI has recommended that spectrum be auctioned by means of a simultaneous multiple round ascending auction (SMRA). This means that the service providers would bid for spectrum in different blocks simultaneously. In the first round of auction a reserve price (base price) set by the government is used.
Reserve price for auction and payment mechanism
A reserve price indicates the minimum amount the bidder must pay to win the object. In case it is too low, it may reduce the gains made by the seller and lead to a sub-optimal sale. If it is too high, it may reduce the number of bidders and the probability of the good not being sold.
Various countries have adopted a reserve price of 0.5 times the final price. TRAI has recommended that the reserve price should be 0.8 times the expected winning bid. It has also recommended that telecom companies pay 67% to 75% of the final price in installments over 10 years, depending on the spectrum band.
TRAI has reasoned that a higher price would reduce the possibility of further sales upon bidders securing spectrum. However, this may lead to fewer bidders and ultimately fewer service providers. It is argued in news reports that this may increase investments to be made by the service providers and eventually an increase in tariffs.
Spectrum blocks and caps
TRAI has recommended that the spectrum cap should be determined on the basis of market share. A service provider can now secure a maximum of 50% of spectrum assigned in each band in each service area. However, a service provider cannot hold more than 25% of the total spectrum assigned in all the bands across the country.
As per the January 2008 decision, additional spectrum could be awarded to telecom companies when they reached incremental slabs of subscribers. This could extend to two blocks of 1 MHz for GSM technology, and two blocks of 1.25 MHz for CDMA, for each slab of subscribers.
TRAI has recommended that spectrum should be auctioned in blocks of 1.25 MHz. Each auction would at least offer 5 MHz of spectrum at a time. Smaller blocks would ensure that service providers who are nearing the spectrum cap may secure spectrum without exceeding the cap. However, experts have argued that 1.25 MHz block may be too limited for launching services. Also, TRAI in the recommendation has noted that a minimum of 5 MHz of contiguous spectrum is required to launch efficient services with new technologies.
Use of spectrum
TRAI has recommended that the use of spectrum should be liberalised. This implies that spectrum should be technology neutral. Telecom companies would now be free to launch services with any technology of their choice.
In response to the Telecom Regulatory Authority of India’s (TRAI) recommendations on the Auction of Spectrum, the Cellular Operators Association of India (COAI) has questioned the rationale behind the recommendations. It has said that the guidelines favor dual technology license holders, thus distorting the level playing field with GSM operators in particular and perpetuating discrimination in the industry.
Extensive Use of Fibre Optics
In Many Fields Including High Rise Buildings
A few cities in India boast of having numerous high rise buildings both for residential and commercial purposes. Managing these buildings is done through contract basis. Planners can do well to encourage builders in future to go in for the latest and modern technologies for commercial high rise buildings and residential buildings in a manner that no wires are visible or found loosely hanging in the premises.
Fibre optic communication should be encouraged to be used extensively in commercial buildings and other high rise buildings besides other modern invented technologies. It will be easy to manage and maintain these buildings if they are connected through fibre optic cablings processes. In fibre optic cables, it is a bundle of glass, and this is capable of carrying huge information in the form of light. The light forms as electromagnetic carrier waves modulated to carry massive amount of information. Transmission through this mode is extremely superior to the modes used by metallic wires or other transmission mode.
Principal benefit of fibre optic cables:
Optic fibre cables enables transmission of data at very high speeds with minimum data loss;
Highly complicated wiring jobs can be made simple with optic fibre technology;
Optic fibre cables can be used in sensory devices for measuring even small change in temperature, vibration, pressure and other similar parameters which could be measured;
Transport systems can be revolutionized by introducing optic fibres for intelligent light traffic controls and automated tool booths;
Space programs can find this technology very useful;
In the field of medicine, this technology is very useful in light guides, imaging and diagnostic tools;
Less susceptibility to outer interference from light and radio waves;
Enabling higher bandwidth for faster and reliable data transfer;
More durability when compared to metal cables;
If the production cost of optic fibre cables can be brought down significantly, its wide usage will get a solid boost. Developing and developed world boasts of high percentage of percapita consumption of fibre optic cables. Therefore, India can do well to encourage users to massively use fibre optic cables, cloud computing and other technologies whose maintenance and management are relatively easy.
The use of an organic material has been put in place a structure capable of transmitting data at rates eight times higher than those of traditional devices.
The study of materials capable of transmitting data at ever higher speeds is the constant challenge of the technology of optical communications. The use of a new organic material, tested by a team of U.S. and European research coordinated by Ivan Biaggi of Lehigh University (United States), has enabled to achieve data transfers much higher than that obtained so far with traditional devices.
Phase III of FM Radio Soon
Very Vital For the Industry
With the arrival of FM phase iii, the radio industry is expecting to boom and prosper as the new policy will open up gateway of opportunities for the broadcasters. The policy extends FM radio services to about 227 new cities, in addition to the present 86 cities, with a total of 839 new FM radio stations. In spite of multiple opportunities, a snag that is still haunting the radio broadcasters is “Innovation”?
Is there innovation going to happen in radio? Should the stations innovate or just replicate the early era of radio, which used various kinds of content like talk shows, reality shows, regional music beyond playing bollywood music? How can digital and social media be used to exploit and expand the opportunities in radio? Were the big questions raised, debated and discussed at one of the sessions of Ficci Frames 2012.
‘Radio: Innovations in Content’ moderated by Radio City CEO Apurva Purohit included panelists: Big FM business head Rabe Iyer, columnist & writer Bhavna Somaaya, O&M executive creative director Abhijit Avasthi, and Ryerson University chair of the Radio and Television Arts School of Media Charles Falzon.
Within the context of music, a lot more content can be created on radio. In the last five years it was not possible but today there are various opportunities to explore content on radio. There has been programmes like ‘Yaadon Ka Idiot Box’ on 92.7 Big FM, Ramayana on Fever 104 FM etc. “It is imperative that we innovate. With Phase-III we will have multiple frequencies which will help us grow. Entertainment agenda is fast changing and radio has to redefine sound than just being a source of entertainment,” Iyer said.
Providing a content creator or writer’s perspective on the concern, Somaaya noted, "Innovation is a very subjective term. It can only come through content, as technology has already been exhausted. Producers should get liaison and start doing informative content on radio as it is the most immediate medium amongst others.”
Avasthi shared his views on strengthening the medium by creating innovative advertisements. He noted a very crucial fact that writing a radio spot was the toughest for an advertiser, than making a TV commercial or a print ad. “On radio you got to conjure an entire visual world in the person’s mind. Great advertising is not only about writing radio spots but it is
5 reasons why Phase III is vital for FM radio growth
1. More reach:
The reach of radio will further increase with an additional 839 new FM stations in more than 200 new cities. Thus the medium will become even more effective and the opportunity will also be huge for the advertisers, especially because of radio’s reach in even the tier 2 and 3 cities.
2. News in FM radio as a revenue stream
News on FM radio, in whatever form, will open up newer revenue streams if packaged well. The industry, for long, has been waiting for news to be allowed on radio. It will therefore be interesting, especially from the listeners as well as the advertisers’ point of view.
3. Multiple Frequencies to create new genres
Multiple licensing, especially in larger cities, will bring new genres to radio. Larger stations, for instance, may want to create another genre of station, perhaps in a different language or a completely different programming category altogether. This will be another interesting facet for the advertisers and listeners.
With general move towards mobility, content consumption is undergoing a sea change. It seems on-the-go services are going to be the taste of things to come. Even for television, Indian consumers are increasingly consuming content on non-TV devices such as smartphones, tablets and personal computers with nearly 200 million monthly video downloads across platforms. While the market is still nascent, its fertility can be gauged by the fact that off late it has seen entry of a blitz of broadcasters and telecom service providers vying for a slice of TV on-the-go market.
In 2011, MTNL launched mobile TV services for its 2G and 3G subscribers in Mumbai and Delhi. In early March 2012, Zee New Media launched India's first over-the-top TV distribution platform, Ditto TV, which provides television content to customers on mobile phones and tablets. Zenga, a pioneer in the mobile TV segment, operates with a 65-70 per cent market share and is reported to have achieved 421 million video views in 2011 compared to less than 150 million video views in 2010.
Companies like Apalaya – with 2 million subscribers and 200 per cent growth; are turning out to be profitable ventures as well. According to Mr Ravi Kunwar, Manager-North, Nokia India, industry reports suggest that mobile video is used by over 11 per cent of global online consumers. “Penetration is the highest in Asia-Pacific and among consumers in their late 20s. The reports also state that India ranks 4th in mobile video consumption globally,” he adds. India is reported to have a subscriber base of one million active users of mobile TV, while six million active subscribers have access to 3G services.
The story of beginning
"The big gorilla in the game is the operator," says Raj Singh, managing director, 2ergo India. It was the spread of mobile telephony on the back of which ringtones, caller tones, wallpapers or clips among other media services started selling like hot cakes on phones. Thanks to the aggressive marketing of telcos as well as their ability to bill and collect money, the market for mobile data services doubled between 2007 and 2010.
This happened, however, with a structural flaw. Of the Rs 10,000 crore in VAS revenues, just about 5-15 per cent goes to companies that own the copyright over say a song or a film clip. Anywhere between 15-20 per cent goes to the aggregators. The rest, between 60-80 per cent is retained by telcos. This is the exact reverse of what happens in Europe and Japan where content companies get a bulk of the revenues.
This is because a chunk of India's 873 million mobile subscribers are carved out between half a dozen major telecom firms. On the other hand, media is an extremely fragmented business, with hundreds of small shops making films, music or television shows. The telco, then, is the guy with the upper hand.
Harit Nagpal headed marketing for Vodafone globally before he became the CEO of Tata-Sky. He reckons that revenue share is a matter of demand and supply. "If it is content nobody has access to, say a regional hit, then I have paid 80 per cent also. But if it is plain cricket or clips then anything between 3-10 per cent is fine," says he.
While this lopsided split has caused bad blood between content firms and telcos, aggregators, remain sanguine. "It is what the market will pay. To complain is un-businesslike," says Vishwanath Alluri, founder, chairman and CEO, IMImobile.
Step by step
Against this background came four big changes. The first is competition. India's rapid mobile growth, attracted more players putting pressure on prices and margins. There are aggregators now for content, technology, content plus technology and a host of other things, crowding what is essentially a Rs 4,000 crore pie. So, "Consolidation has to happen," says Alluri.
The second is revenue share. When there wasn't much competition this did not matter. But over the last five years, well-funded technology or content start-ups don't see the need to take a lower share. For instance, Zenga TV started by going to the telecom operator. It soon discovered that it would get only 10 per cent and that too nine months after the sale. "We invest in the content, servers, technology. But they decide the price and who to sell to and how. And we don't have the right to audit their books. So we decided that we will not work with the operator," says Shabiir Momiin, CEO, Zenga.
The third is the arrival of smart devices, such as an iPad or an iPhone that made it easier for aggregators to think of diversifying. So aggregators or content firms can sell apps or simply embed a service into the device. That means dealing directly with the device makers. "The new power centres now are the Apples and the Androids," quips one senior manager in a aggregator firm. And they are growing. One McKinsey study reckons that India will have about 450 million smart phone users by 2015.
The fourth change, says Roy, "Has to do with the complexity of the ecosystem." He explains that when there is a request for a song, the platform has to recognise that the song will be played on a Blackberry or a Nokia phone. It has to be configured for different devices and operating systems. Until now only the PC and Mobile were used. Now all devices are smart, there is TV also, so the complexities keep increasing. Hungama, for instance, has about 900 people. Of these 300 are engineers and 100 do meta tagging. Their job is to ensure that the content works across a staggering 2,800 different platforms. This complexity shifts the goalpost from being a vendor working on wafer thin margins to being a firm that can make better margins, either by innovating on technology, content, payment systems or by becoming a brand.
Turnover
“We started in 2009 and within the next 24 months we broke even. Today, we are a profitable company,” Mr. Shabir Momin, CEO, Zenga TV, admits. Zenga TV, follows a free model, with 100 plus channels. The model, he claims, is not dependent of mobile operators but works with handset makers and OEMs (original equipment makers) who are his revenue generators. One such example is the Nokia Asha smartphones (Nokia Asha 303), which has a pre-loaded Zenga TV app.
“A Zenga TV user spends nearly 12 minutes watching videos (compared to the industry average of 30 seconds to 3 minutes). Perhaps this has been the reason for our success. Since we work directly with consumers and the applications are embedded directly in handsets, it's easy for users,” Mr Momin says. Mr Vamshi Reddy, founder and director of Apalaya Mobi TV, is upbeat about doubling subscriber base to 4 million after having bagged IPL V mobile rights.
Cable TV Digitalisation Rules 2012
Notified By I&B Ministry
The Information and Broadcasting Ministry on 29th April notified the much awaited Cable Television Networks Rules, 2012, paving the way for digitalisation of the sector. Officials said the I&B Ministry has set June 30 as the date for digitalisation of the cable sector in the four Metros and these cable rules would provide the framework on which the digitalised cable networks would provide services. As per the new rules cable operators and Multi Sector Operators (MSOs) will now have to ensure that they have the capacity to carry minimum number of channels as specified by the Telcom Regulatory Authority of India (TRAI). TRAI is expected in the coming days to specify the minimum number of channels that each cable operator and MSO will have to show as per the cable rules issued. "This provision is just one of the consumer friendly provisions in the rules because it will ensure that every consumer gets a minimum variety of TV channels through the cable," said an official.
Officials said that another consumer friendly clause that the rules include is that MSOs will have to buy back set top boxes from their subscribers if the customer happens to be moving out of the area.
In case a cable viewer is not happy with the quality of service, a provision to surrender the STB back to the MSO and the cable operator have been provided in the new rules. With the government's digitalisation drive, customers are required to install STBs on their TV sets, but the new cable rules mean that customers will not be stuck with STBs in case he wants to change his service provider. Cable operators and MSOs will have to set up a grievance redressal mechanism and subscribers can file complaints and get time-bound redressal if they are not satisfied with service quality, the cable rules state. The new Cable rules notified also redefine the procedures for Multi Sector Operators (MSOs) who will have to submit a processing fee of Rs One lakh for registration in an entity in place of Rs 10,000 as was the case earlier. However, officials said there was no change in fee for registering as a Local Cable operator.
MSOs will now have to register with the Central Government while Local Cable Operators, like previously, need to be registered with Head Post office within whose territorial jurisdiction, their office lies. Under the new rules a provision of provisional registration to avoid delays in giving clearances to MSOs and LCOs has also been added. The rules state that whenever an application has been made under the relevant rules, the registering authority may grant provisional registration after preliminary scrutiny of such applications. Under the new rules, the application procedure for cable operators has also been reworked, sources said. "After the notification of the Cable Rules, it is the tariff rates for Channels, that TRAI is expected to release soon, which will mark important steps towards Digitalisation of the cable sector," said a senior official.
Television viewers will soon be able to watch their favourite shows, movies and sports telecasts with fewer advertisements in between. "There is no doubt that in India, the television viewing experience is bad," said Devendra Parulekar, partner, Ernst & Young. He said the top four-five general entertainment channels are running around 14 minutes of advertising in a clock hour, while the permitted limit is 12 minutes - 10 minutes of ad commercial and two minutes of channel promotion time. "Besides, during film climaxes, the ad breaks' frequency goes up and volume levels on your television go through the roof when the ads come on."
TRAI, which has oversight over the country’s broadcasting sector, has decided to restrict and fix an upper limit on the duration of advertisements aired on television channels.Sources said the broadcast regulatory authority has initiated process of widespread consultation with stakeholders over advertisements on TV channels. "After a detailed study, Trai will soon prescribe upper limits on the duration of advertisements," a source said.The move was initiated after the regulator got complaints from viewers on the increasing number of advertisements.
Among issues being discussed are scheduling advertisement breaks only during interruption in sporting action in case of live telecast of sporting events, and defining time gaps between consecutive advertisement breaks during telecast of movies and other programmes. Sources said though the Cable Television Network Rules, 1994, clearly say not more than 12 minutes or 20 per cent of advertising for every one hour is acceptable, not many TV channels adhere to these rules. "The increasing duration and distracting formats of advertisements has, however, adversely affected consumers’ viewing experience," the sources said, hence the need for this consultation.
Suo motu initiative
While welcoming the suo motu initiative of Trai in this regard, the Consumer Education and Research Society (CERS) said the proposed stipulations do not mention any norms for the local cable operators who continuously show ads in addition to regular ads shown by channels.
It said for children-specific channels and programmes, the ad duration should be further decreased from 12 minutes for free to air channel and six minutes for pay channels to six minutes for FTA channel and 3 minutes for pay channels. Advertisers target children - who are more susceptible to false and misleading claims shown in TV ads - to influence the purchasing decision of parents. In Australia, she said the restriction on ads is very stringent, where no commercial may be broadcast in the pre-school children’s classification zone. In New Zealand, TV ads are banned on Christmas day, Good Friday, Easter Sunday, etc., and also advertising of unhealthy products like alcohol is banned.
CERS chief general manager Pritee Shah suggested that similarly, Trai may also curb TV ads during festivals like Diwali, Holi, Christmas, Eid and New Year. Heavy advertising during the festivals leads to over consumption and wastage of resources, which is against the principles of sustainable living, she said. Inserting ad breaks during a live show/ programme reduces its viewing experience. Similar to sports events, advertising should only be inserted at natural breaks in programmes such as concerts and live events. She pointed out that Norway has a similar provision on ad breaks.
India’s Digital TV Penetration
To Rise 50% by 2016
India will remain the key pay-TV market in Asia as the penetration rate of digital TV grows to encompass half the population by 2016 and 61% by 2020, says a new report from Media Partners Asia (MPA).
Just 20% of India's homes had digital television in 2011, but the mandatory drive to digitise the cable TV network, as well as the six commercial direct to home (DTH) pay TV platforms, in addition to DD Direct, the DTH platform operated by the state broadcaster Doordarshan, will attract more and more subscribers in the coming four years.
"India's digitalisation timetable implies a three-year transition to full digital TV (DTV) conversion. This is ambitious, though we believe DTV transition will occur but over a longer time frame," said Vivek Couto, executive director, MPA.
"The industry will remain capital-intensive until 2017 at the earliest, due to the capex requirements associated with digitalisation. This will lead to more mergers and acquisitions (M&A) and fund-raising activity in both primary and secondary markets. The sector's improved transparency, scale and operating leverage will attract large domestic and international strategic players, who will play a key role in M&A activity," he added.
MPA predicts pay TV subscription fees will grow at an 11% compound annual growth rate from 2011-2016, driven by increased DTH and digital cable volume. The total number of pay TV subscribers in India is expected to reach 172 million by 2016, and 199 million by 2020.
100m digital TV subscribers in 5 years
Due to cable digitisation and fast-paced growth of six private DTH players, India will have 100 million active digital television subscribers in next 54-months, nearly three-fold jump from the current numbers, while overall pay-TV subscribers will cross 170 million.
This will lead to a windfall revenue gain of R30,000 crore for the direct-to-home service providers and the organised cable companies said the latest report on Asia-Pacific Pay TV market report by international media research firm Media Partners Asia (MPA).
As a result of the three-year mandatory digitisation drive, a number of mergers and acquisitions (M&A) and fund raising activities will take place in India, the report said. However, the DTH players will lead the race cornering around 65% of the revenues while broadcasters will reap the benefit of the DTH versus Cable competition generating R34,000 crore in revenues during the period.
According to MPA report, while DTH firms Dish TV ($409 mn) and Tata Sky ($450 mn) are among the top 10 leading pay-TV platforms by revenue, Sun TV ($255 mn), Star India ($193 mn), Zee Entertainment ($168 mn), and Sony India ($125 mn) are among the leading profitable broadcasters.
"The digital pay-TV penetration of TV homes in India will grow from less than 20% in 2011 to 50% by 2016, and 61% by 2020," said the MPA report.
According to MPA executive director Vivek Couto, the majority of DTH platforms will be generating free cash in the next three to four years.
“The active DTH subscriber base (i.e. paying customers only) could grow from 29 million in 2011 to 69 million by 2016, and 93 million in 2020. This implies a 46% share of the overall market by 2020 (versus 23% in 2011), and a 65% share of the digital pay-TV market,” Couto said. However, rise in subscriber acquisition cost due to competition and satellite capacity constraints will remain the concern for the DTH players, he said.
The MPA report said the DTH industry revenues will reach almost $4 billion by 2016 with revenue growth largely driven by expanding the subscriber base.
