The year 2009 has been a dynamic one for the Indian cable industry. Several developments and key decisions that took place hint towards a very promising 2010 for the industry as a whole and, of course, the consumer. Continuing its boom, the cable industry is all set to ensure that the TV is not an ‘idiot box‘ anymore!

Problems faced by Southern operators

Cable business is spreading its wings all over India. In urban Karnataka and Madhya Pradesh, it has also undergone a massive change in the last couple of years as the industry, from being extremely fragmented earlier, has now become more systematic and corporatised. With a growing market share in these states, digital cable is becoming a larger chunk of the pie and is on its way to give DTH a run for its money.

However, there are still some pertinent challenges that lie in the path, especially for Southern operators. One of the challenges faced by them is that vis-?-vis digital, DTH has a larger geographical presence. Despite DTH being much more expensive than cable, it has higher penetration because digital runs through a cable network, and that limits any player‘s footprint to the area already cabled by them.

Also, though the cable industry has changed massively, it is still fragmented. Hence, any operator going national needs to accommodate a number of industry-specific issues, such as adjusting to rapid technological change, working and accommodating with different workforce demographics, changing and restructuring the entire face of the organisation.

Another challenge lies in the fact that since a large part of the cable industry is still unorganised, the corporate players within the industry at times face content related challenges. Large corporate players, as a policy, do not relay illegal films unlike the small players that telecast all kinds of content in order to get a higher viewership.

Also there is an oversupply of service providers in the Indian market, with various small players present everywhere. This is also because starting an analogue business requires small investments. In addition to this, with growing inflation, there is less advertising to support the services. Domestic regulations limit advertising to just 10 minutes per hour.

Last but not the least, with DTH penetrating in every corner of the country, analogue service providers are now facing a major roadblock where profitability is concerned. Consolidation is the way of the future and will bail them out.

An eventful 2009

Cable industry has seen a major shift in the last couple of years when more and more organised players have entered the market. This shift in the industry has not only improved customers‘ TV viewing experience with better picture quality, consistent network and improved content on local channels, but it has also drastically improved the quality of overall customer service. For example, ACT Television not only offers a call centre service but also offers instant personalized customer service through its professionally trained cable operators.

In my opinion, a very important development of 2009 that will make 2010 a smooth year for corporate players is that legal action would be initiated against small cable television operators showing unauthorized and prohibited programmes including obscene films. Moreover, if the programmes televised by the channel create resentment among a particular community, the affected persons can also lodge their complaint with the district administration.

Towards the end of 2009, HITS (Headend-in-the-Sky) was approved. HITS will allow use of satellites to distribute cable signals instead of the traditional cables that operators use. This is similar to the DTH system - the only difference being that in this case, cable operators will download signals for further distribution in homes.

As far as the HITS policy is concerned, while the government has taken a major step in addressing the challenges of digitising the country‘s television homes, the work is only half done. They also have to set a timetable for the pay channels to go exclusively digital. Without this step all that has been done is a policy statement without teeth in the area of encouraging enforcement. Ideally both announcements should have come together but a quick decision soon on compulsory digitalisation for pay channels will ensure that the advantage of digital would be experienced by the customer.

Parts of India have recently been exposed to the Internet Protocol Television (IPTV) services. Companies offering IPTV are mostly conducting pilots in bigger cities of India, such as Delhi, Mumbai, Bangalore.

A promising 2010

With 111 million Television Homes and 85 million C&S Homes, India is bound to see many changes in the coming year and years ahead. Indian cable TV industry has a huge potential and that is being recognized by people.

More and more customers are demanding better picture quality, more channels and better customer service - all at affordable prices. Hence, digitalisation is inevitable and seems to be the only way forward for analog service Providers. Also the need of the hour is clearly training and a reminder that "the customer is King."

Also, cable TV offers many other benefits such as city specific channels, that provide complete city related information throughout the day to viewers. This gives viewers a pulse on the city and keeps them updated on events and happenings in their immediate surroundings. Often something that impacts life in the city is covered first by the local city channels and they are surely becoming indispensible.

Not only this, cable TV has become a great platform for providing, entertainment, information and also education. This is rapidly changing the TV viewing habits in our country which has close to 51 million urban households and 60 million rural households.

Strategic partnerships with various content houses will determine how any service provider progresses. This will also put an end in the near future to broadcast of pirated content.

Building a robust subscription income, digitising rapidly and developing broadband as a revenue stream seems to be the business model all the leading multi-system operators (MSOs) are going to chase after having spread their tentacles across the country. Apart from this ‘Value Added Services‘ are a definite means to generating revenues. Services like education on TV, web browsing, gaming and ticket booking have a huge potential in the Indian market.