The government itself flouted interoperability norms

In five years India has managed to overtake Japan as the largest DTH market
in Asia by crossing the figure of six million plus subscribers. By 2012 it is
expected that India will be able to add another 30 mn subscribers, which is
about the same as the present population of Belgium, Portugal and Greece put
together. On this rosy growth path, Vikram Kaushik, managing director and CEO,
Tata Sky talks to Voice&Data. He throws light upon various challenges he
identifies as part of Indian DTH industry and the way DTH business is gearing up
for future. Excerpts:

What are the challenges that DTH players are facing under the conditional
access system (CAS) regime?

We don't have a level playing field compared to cable operators under CAS.
Under CAS, cable operators are provided channels at Rs 2.5 per subscriber but
for the same channel, DTH operators have to pay up to Rs 20 per subscriber.
Therefore, we have suggested that Trai and the Government of India have the same
term that had been extended to digital cable under CAS for DTH. It will help us
price our products for our customers to ensure a level playing field.

If you look at license fee, cable operators have to pay Rs 2 crore per
annum and DTH players pay Rs 10 crore for 10 years. Don't you feel that DTH
players have an edge on this front over cable operators?

No, because cable players declare only 20% of their connections.

What according to you should be done to generate more accountability in
the cable industry?

Address-ability and accountability are extremely central to the government
policy. This is the way the government gets taxes. I would recommend that the
government should be extremely strict and apply regulations to address the cable
industry as they do with DTH players.

It had been alleged that DTH players are lobbying against pan-India
implementation of CAS. What do you have to say?

It is absolutely incorrect.

Which are the taxes that you would like to see go down on priority basis?

The current license fee is too high. The revenue share that we pay to the
government is 10%. In case of mobile telephony and FM radio, it is between 4to
6%. We see that in the revenue sharing model there is a lot of scope for
deduction.

Vikram Kaushik, managing director and CEO, Tata Sky

Secondly, there should be no double taxation. On one side we are paying
service tax to the central government and on the other, state government are
charging us entertainment tax.

Have you discussed this issue with the government?

Yes, we have been talking to both governments but there has been no response
from them yet.

Are you doing anything to reduce tariffs for customers?

If the taxes are lowered we will be able to do so.

Are there any other alternatives?

The other way of reducing cost is by reducing cost of content that the
broadcasters pay for DTH. Numbers are growing and DTH players declare every
single connection. The advantage of this is that broadcasters are now getting
guaranteed revenue from DTH. In case of cable it is anybody's guess because it
is under-declared and tax compliance is doubtful. Therefore, it makes sense for
broadcasters to provide content to DTH players at better price to get better
results.

How will the option of interoperability among DTH players reduce cost for
consumers?

The current regulation requires interoperability. Technically, set-top-boxes are
supposed to be interoperable. Except that the government itself flouted
interoperability norms allowing launch of MPEG-4 by STBs which are not
compatible with MPEG-2 boxes. The government has to first sort out which way it
wants to go.

Now since you have also moved on to the MPEG-4 platform with Tata Sky
Plus, is interoperability now feasible?

Tata Sky Plus STB is a different product altogether and is not compatible
with STB of other players. It is the base STBs where something can be done that
the government still needs to sort out.

What is the status of interoperability talks among DTH players?

We have discussed it enough. We have sent them our recommendations more than
six months back. It is on the government when it plans to respond. It has to
revise the standards. Now everything is between the Information and Broadcasting
Ministry and the Bureau of Indian Standards (BIS).

What are you doing to increase interactivity in your DTH service?

We keep introducing new interactive functionalities. The latest one, Active
Matrimony, has been very successful. We continue to update some of the existing
ones. Like with NDTV Good Times we are running function which has recipes from
which people can choose and cook different kind of meals at home. We have just
introduced an option of changing language at active cooking mode.These are the
kind of ways we keep looking to increase interactivity.

Still most of the interactivity happens from only service providers. Are
you working on enhancing interaction from the audience side like getting instant
comments on programs or chat among viewers?

We are not an Internet service. Those who want to give feedback are most
welcome. They can visit our website and give us their comment. We go through
each one of them and respond. People can also call at our call centers and we
will be very happy to respond.

IPTV is said to be more interactive compared to other medium. Will it take
away some DTH customers on the basis of interactivity feature?

IPTV is a different technology all together. It is based on fibre. It has to
be delivered by fibre. So, I cannot comment on the IPTV market at the moment.

How is DTH gearing up to keep its audience from moving on to other TV
platforms like mobile TV?

The digital satellite sector in itself has enough growth potential and we
should focus on it rather than looking at surrounding technologies and the
services they offer. In any case, if you look at mobile TV, they are talking
about out-of-home viewing which is a completely different market altogether
compared to the in-home television viewing that satellite TV offers.

What is the business opportunity being generated by increasing
interactivity function for viewers?

The kind of growth we have seen and the feedback that we have received shows
that people enjoy interactivity. From our research, we have learnt that 20% of
the time a Tata Sky viewer spends on TV is basically spent on interactivity.
This has resulted in an increase in our number of subscribers.

Are you doing anything to contribute to audience the measurement process?

At the moment there are various agencies being set-up in addition to TAM. We
are looking at how things develop and then we will act.

Are DTH STBs capable of contributing to the audience measurement exercise?

As far as technology within the box is concerned, we are evaluating and
studying for audience measurement. The technology implementation step needs to
be taken through many steps before we arrive at any conclusion.

Prasoon Srivastava

prasoons@cybermedia.co.in