In a major positive development for the Indian TV distribution space, the I&B Ministry has given its approval for the TRAI recommendations and proposed a revised schedule for digitisation of cable distribution in the country

The information and broadcasting ministry has accepted the Telecom Regulatory Authority of India's (TRAI) recommendations on complete digitisation of television broadcasting, but it has proposed pushing back the deadline for implementation from 2013 to 2015. Representatives of cable companies are meeting TRAI officials today on the issue.

The ministry's proposal has been hailed by cable companies like Den and Hathway Cable, whose stock prices have surged after the announcement on Saturday. Cable operators are beaming too, as the deadline extension will enable them to educate their subscribers about set-top boxes (STB).

According to the ministry's proposal, digitisation will take place in four phases: the four metros Delhi, Mumbai, Chennai and Kolkata will be covered in Phase I by March 2012, Phase II will cover cities with more than one million population by March 2013, urban areas will be covered in Phase III by March 2014 and the rest of the country in Phase IV by March 2015.

Experts are optimistic about the move. Nikhil Vora, analyst at IDFC Securities, says, "The push may translate into overall growth for the industry. Not to mention, it will provide the viewer with more choices." To encourage the move, duties on the necessary equipment will be decreased and companies will be allowed to lay out optical fibres. TRAI has recommended that companies who complete digitisation by the deadline will be eligible for tax benefits and may even be granted tax holidays.

Roop Sharma, president of the Cable Operators' Federation of India, welcomed the move, saying that with digitisation allegations against cable operators of not revealing their actual customer base would be proved false. Moreover, with no extra charges being levied and prices of STBs decreasing, digitisation will enable operators to add more channels and make the sector more organised, thus opening the way for institutional funding.

Digitisation will bring in better picture quality and offer a plethora of interactive services like video gaming, tutorials and teleshopping. The a la carte option, which has become available only recently with direct-to-home service providers, will now be available to all cable subscribers. The viewer will be able to choose the channels he wants to watch, and pay only for these channels.

How will this move affect existing service providers? "It is true that they will face stiff competition, especially the smaller ones. But then, it was always the cable operators who got the lion's share in broadcasting," said an analyst. "These DTH service providers will provide other exclusive benefits and channels for their respective subscribers, which will ensure their revenues from their premium features."— Shukti Sarma