Digitisation of TV to involve investment of upto Rs 40,000 cr

Entailing an expected investment of upto Rs 40,000 crore, the digitisation across the country will be completed by 2014 year-end after which the government would earn Rs 30,000 crore each year on various accounts, including subscription.

"It is generally a very big reform of the Broadcasting industry," Information and Broadcasting Minister Ambika Soni told PTI in an interview.

She said the entire process of digitisation, that is to be implemented in phases, will be completed by December 31, 2014.

In the first step, the digitisation will be conducted in four metro cities by June 1, next year, two months after the target date set for it in a proposal approved by the Cabinet.

Explaining this delay, she said there was a provision for giving a six-month notice (after Cabinet decision). "So we are having to change it from March 31, which was the time the metros had to (do), to June 1. But it doesn't disturb the rest of the schedule," the minister said.

The current analog cable system offers consumers no choice of channels they can select. Generally, single rate is charged from customers and the package is mostly of 80-90 channels.

Digital platforms will carry more channels and offer better quality. Digital cables have the capacity to carry up to 1,000 channels.

The move is expected to benefit broadcasters also as it will remove the need for paying carriage fee to cable operators, bringing down the cost of operations.

At present, carriage and placement fee contribute nearly 20 per cent of the total cost of running a channel.

After digitisation, all satellite channels will be beamed to houses through set-top boxes.

"Earlier it was that the cable operators, those who had analog system, were not always onboard," Soni said, adding that it was "not an addressable system" as the government was losing out on revenue.

The I&B Minister said digitisation would lead to an "addressable system" and that digital signals can be routed through cable operators who would have to go for the maximum investment of Rs 3 lakh each for it. "They have welcomed it," she added.

"It is also a step in favour of government. In analog system, it was very difficult to tabulate. Government loses out on revenue," she said.

By undertaking digitisation, the government expects to mop up revenues to the tune of Rs 30,000 crore approximately per year, she said, adding that it would be on account of fees, subscription, etc.

The government has got Telecom Regulatory Authority of India (TRAI) on board and both are working together, she said.

On the financial implications, she said the process could involve investments between Rs 20,000 crore to Rs 40,000 crore and the issue has been referred to the Committee of Secretaries for sorting out.

"I think this would mean an investment obviously and people who have to do the investment were waiting for us to announce this policy," Soni said.

The I&B Minister explained that some financial implications, which could be called incentives, could not be a part of a Cabinet note. "So, the Cabinet took a decision that all those issues would be looked at by a Committee of Secretaries headed by the Cabinet Secretary," she said.

The Committee, which also includes Revenue Secretary, IT Secretary and I&B Secretary, will give its considered view within a month.

When pointed out that the Finance Ministry had been hesitant in funding the project, Soni said, "They are right. The incentive type of suggestion should not really form part of the Cabinet note. So those have been put before a COS under the Cabinet Secretary. they will discuss that and give the answers."

The help that had been sought from the Finance Ministry was in the form of exemption of tariffs.

Soni did not elaborate but sources said the Ministry, in its proposal, had said all entities involved in digitisation be considered Infrastructure Service Providers, and tax concessions be accorded to them till complete digitisation is done.

The I&B ministry had suggested measures like waiving the five per cent duty on set top boxes that would have to be imported and installed by the consumers.