"Say Yes for CAS but No for STB".
It has been a harrowing experience
for Chennai consumers of the Cable TV service after the introduction of
CAS in the city. The consumers who were already reeling under a tightly
controlled Cable TV operator's network which made them slaves to the
operators feel as if they are now thrown from the frying pan to the fire.
Ever since the Cable TV operators
were taken over by the supporters of one of the political factions of the
State about 5 to 6 years back, consumers have lost the choice of their
cable TV suppliers except in certain pockets today where there is a second
choice. With the MSO based supply replacing the earlier Operator level
Dish based Cable TV distribution, the entire industry came under the
control of two MSOs namely the SCV of the Sun TV group and Hathway of the
Star TV group. It is said that SCV controls 90 % of the market. In the few
areas which are fortunate to have dual operators, bitter fights amongst
the two competitors are common and often result in each other cutting the
cables of the rival suppliers unmindful of the inconvenience to the
The extent of frustration suffered by
the consumers can be gauged by the behaviour of one of the Cable TV
operator's assistant who demanded a house wife to fall at his feet for
restoring a connection which she had earlier chosen to cancel. In another
area, an office bearer of the Cable TV consumer's association was
threatened, his motorbike burnt and household utensils ransacked.
It was therefore natural that when a
system of regulating Cable TV industry was proposed, there were many in
Chennai that this would regularize the Cable TV operators to the benefit
of the consumers. They felt that while the operators are now charging a
fee of Rs 175 to RS 325/- per month in different parts of the city, there
would be an uniform around RS 200/- charge as promised by the I&B
minister. Some felt that the free bouquet of a minimum of 30 channels (Hathway
offers 54 channels) at RS 72/- would be good enough for them and they
would be happy to welcome CAS for this reason. However the consumers are
unanimous that they are not interested in buying the Set Top Boxes at a
cost of RS 3500 to Rs 4000 as offered by SCV or under a deposit cum rental
basis offered by Hathway.
Hence the Consumers came up with a
strange conclusion in a recent meeting "Say Yes for CAS but No for STB".
There Can be No CAS without STB
However, it is necessary for
Consumers to recognize that their dream of 54 free channels for RS 72 is
unlikely to materialize and there is a distinct indication that they would
be forced to buy STBs even when they opt out of all pay channels as was
indicated by the industry representatives in the meeting held on 3rd.
It has already been announced today
(5/9/03) that the total amount payable for free channels would be around
RS 98/- of which Rs 20 would be the Entertainment tax and RS 6 would be
the service tax.
The reason why the operators are keen
on STB introduction for all customers is the fact that if 90 % of the
clients opt to stay with free channels, then their total revenue would
come down from the current average levels of RS 175/- per month per
customer to around Rs 125/- per month per customer. Additionally if they
opt to declare 100 % of their customer base as is expected by the
Government as well as the MSOs, and Broadcasters, their net income would
go down by more than 50 % from the existing levels. It is unlikely that
many of the Cable TV operators be able to sustain their even current
levels of service under the circumstances.
Secondly, some of the operators are
afraid that if they may not be able to use a single cable to supply the
feed for both Free and Pay channels without the termination at STB. It is
not clear why they are taking this position unless the type of STBs they
are likely to use are such that the descrambling of the signals has to be
done at the operator's level and not at the subscriber's level. Otherwise
they may be concerned with the possibility of illegal descrambling of the
encrypted signals at the consumer's end without their knowledge. Whatever
may be the reason, it appears that the operators prefer to have only STB
regime and if possible STB without CAS rather than CAS without STB.
The consumers should therefore not be
misled into thinking that there is any possibility of CAS without STB. If
such a situation arises, it is likely to be a passing phase and
ultimately, the Cable operator may politely discontinue the free service
or provide such shabby feed that the consumer will be forced to switch
over to the use of STBs.
The Cost of STBs
Hathway is offering its STB at an
outright cost of RS 3125/- with a refundable deposit of RS 400/- and
alternatively at a rental cost of Rs 18 per month with a refundable
deposit of RS 2600/-. An early bird offer of a refundable deposit of RS
999/- and a rental of Rs 30 per month is also being offered.
The declared cost of STBs by SCV in
Chennai is RS 4563/- inclusive of taxes. This is made available only on an
outright sale basis.
Hathway has been able to announce its
channel package with various
packaged offers. SCV is yet to announce any such rates.
It has been announced that the FTA
offer would cost Rs 98 with taxes. Even though it had been originally
announced that the cost of free channels would be RS 72/-, a service tax
component of Rs 8 (11.11%) and an entertainment tax of RS 20(27.7%) has
Who Should Bear the Cost of STBs?
In the entire CAS controversy, it
appears that the basic question of "Who Should Rightly Bear the Cost of
STB?" has not been discussed earnestly. The introduction of CAS is
basically to sort out the difference between the Cable TV operators and
the MSO/Broadcasters on the revenue sharing at their end. In order to
facilitate the counting of correct number of connections, the Consumer is
being forced to keep a "People's Meter" at his residence in the form of
STB. The benefit of STB is significantly more to the Broadcaster and the
MSO rather than the Consumer. For the consumer, it is like getting himself
chained. It is therefore illogical that the cost of STB should be directly
borne by the Consumer.
Even if we agree that ultimately the
cost of STBs would be the cost of service which the Consumer has to bear,
in a market which lacks competition, there is an unfair attempt to impose
the capital cost of STB on the Consumer. It would have been significantly
better if the STBs had been supplied free and the cost absorbed in the
Some of the MSOs are trying to
project as if the STBs are devices that would provide several value added
services to the consumers and hence they should bear the cost just as they
bear the cost of TV. This is not correct since the STBs being supplied now
do not appear to be of the category that will have value added services
such as "Video on Demand". Hence the consumer benefit through STBs is
minimal and there is no justification to hoist the cost of STBs on him.
If the consumer is forced to buy the
STBs because he has no choice, it would be like asking the citizens to pay
to get themselves chained.
Monopoly to Get Reinforced
In the early days of CAS discussion,
the Government was talking of "Open Architecture" for STBs. However, like
many of the promises of the I& B Minister, the industry has ensured a
"Proprietary" technology for STBs. As a result STBs that are being offered
now are MSO specific and are not inter changeable nor can be bought in the
Unlike a TV which the customer buys
as his own choice amongst the many competing brands, STBs are to be
supplied only by the MSOs and by today's situation there is already a
virtual monopoly in the market. Once a consumer opts to buy SCV's STB, he
is tied to SCV as the cable supplier and if he wants to change over to
Hathway, he will have to discard the STB. There is not going to be any
second hand market for the STBS. Also in case of any technical failure,
the Cable TV operator is unlikely to be capable of attending to the
repairs of STBs and the Consumer would be left to bear the cost of
The lack of choice in buying is yet
another reason why the cost of STBs should not be hoisted on the Consumer.
Once the Consumer buys the STB, he
will not only be bound to the MSO but also lose any option to resist hikes
in fees that may be agreed to between the operators/MSOs and the
Broadcasters. He will be like a bonded labour who has to accept whatever
decision that the industry players take.
It is therefore an unjust system
where the Consumer has to pay money for imposing restrictions on the
service that he is supposed to buy. It is against the concept of
The Technology Behind STBs
The MSOs have not provided enough
information on the STBs that are being supplied. Going by the information
available at Hathway website, it appears that they will be supplying
ND1000C model (Korean) of the STB specially made for the Indian
The latest versions of Humax STBs
with all the features that one talks of as capabilities of STBs cost
around $ 700 (PVR8000).
The Humax version made available to
the Indian market is a low cost version which is unlikely to have features
other than the bear minimum requirements such as a receiver, descrambler
and TV tuner functions.
Though Hathway is offering the STB on
a rental scheme and is talking of a possible upgradation, the costs of
such upgradation are likely to be prohibitive.
SCV is offering a Taiwanese model of
COSHIP with one year guarantee. The modelnot
It appears to be a version similar to CDVBC5120. The current versions of
COSHIP are priced in the range of US $200 and above and hence the Indian
model appears to be a low end version only.
Considering the developments in the
Broadband Internet service, the TV feeds are likely to be available in
comparable quality once the last mile optical fibre connectivity becomes
available. Chennai hopes to get the Reliance optical fibre connectivity
soon and even SCV is itself offering such a service with a bandwidth of
TV on ADSL is also being successfully
offered world over and with compression technology improvements, full
screen TV quality streaming video is said to be possible at bandwidths of
around 750 kb. Already, Dishnet is offering 512 kb internet connectivity
in Chennai and we are close to achieving the broad band requirements for
Thus the STBs being offered now
appear to be an intermediary product which is likely to become obsolete
soon. The Government itself is planning to introduce DTH and when it
comes, it will be another alternative system available to consumers.
It therefore appears that Consumers
in Chennai need to assess the opportunities available to them in the next
few months before jumping to buy STBs.