Subscription rev may rise 8-10X due to digitisation: Den

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Subscription rev may rise 8-10X due to digitisation: Den

The cabinet has approved ordinance for cable network digitisation. In an interview to CNBC-TV18, MG Azar, president strategy and business development of Den Networks said, it is a game changer for the entire TV distribution market in India.

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The cabinet has approved ordinance for cable network digitisation. In an interview to CNBC-TV18, MG Azar, president strategy and business development of Den Networks said, it is a game changer for the entire TV distribution market in India. "With digitisation, we expect our revenues to increase 8-10x on subscription front."

Below is the edited transcript of his interview with CNBC-TV18's Latha Venkatesh and Reema Tendulkar. Also watch the accompanying video.

Q: What do you see as the immediate impact?

A: It is definitely a game changer for the entire TV distribution market in India. It will create an environment and a framework that will benefit the consumer in terms of getting more channels on board, and better quality of transmission. It will also allow cable companies to offer triple play services like broadband.

Q: What kind of boost in your subscription revenue could you expect on account of this? Do you still think that now that the ordinance is passed we will meet the rollout which had been earlier set out, complete rollout by December 31st of 2014 and for the first four metros by the end of this fiscal year?

A: The prices of digital set-top boxes and the entire digital infrastructures have come down dramatically over the years. All thanks to standard rating involved and multiple vendors working on it. So, the prices are cheap.

Primarily the investment is going to be in the form of set top boxes. The set top box costs in the region of Rs 1,000-1,200. So, I don't see any major challenges in terms of digitising the network, especially for cable companies because the signals are already in. All you need to do is probably go and plant set top boxes in these markets.

Q: What kind of improvement in your incomes could you see, when the rollout happens across even beyond the four metros?

A: Today, there is a huge amount of underutilisation in market. On an average, we get about 10-15% of the subscription money that is collected from the towns. With digitisation, we expect our revenues to increase 8-10x on subscription front. Our profitability obviously improves over a period of time.

Q: Are you confident that the 2014 deadline will be met? We were thinking that the ordinance will have an enabling provision to increase the threshold of FDI and make it up to 74%. Have you heard anything on that line?

A: I would imagine that today most of the cable companies haven't even finished the 49% headroom that they have. So, I would imagine that over a period of time they will bring it at parity with the all other telecom sectors and eventually make it to 74%. But we haven't heard anything right now.

Q: Have you heard anything about the extension of the deadline even for the four metros? It was March 2012, wasn't it?

A: We haven't heard anything of that. I think March 12 is what the government is contemplating for the four metros.

Disclaimer: Moneycontrol.com is part of Web18 which is a division of Network18 Media and Investments Ltd.