4550277110 5d411854e2 m Cable TV industry in India
by !/_PeacePlusOne

History of TV transmission

In India television transmission started on an experimental basis in Delhi in 1959 and the commercial services commenced in1965.  The television services were expanded to Mumbai and Amritsar in 1972.  Seven more cities were covered by 1975 and sole service provider was Doordarshan.The first satellite based, live TV transmission using the INSAT 1B satellite took place with the live coverage of Independence Day celebrations on 15th August 1982. National telecasts as well as introduction of colour TV were launched in the year 1982 to coincide with Asian Games. There was rapid growth since then and today approximately half of all Indian households own a television. As of 2010, a total number of 515 channels are available in the country out of which 150 are pay channels. In 1992 the government liberalized the policies to allow foreign players which saw the entry of players like Star TV, MTv, HBO and BBC.

The total number of households in India now is 223 million. Out of this 134 million households have access to either cable TV or satellite TV.  20 million households are covered by DTH services and the balance households are provided services by cable TV. While the cable and satellite TV subscribers grow at 15%, DTH subscribers grow at 28% in India.  The urban TV penetration is 85%.

Cable TV

Cable TV was started in India during seventies mainly in metros. During this period, the TV services were provided only by Door Darshan and the customers were looking for variety of programmes. When the video cassette recorders were available freely in India, many enterprising individuals in metros started cable services from their apartment homes and garages, telecasting through cable network English and Hindi movies, music and game shows which were in great demand.

 These cable TVs became very popular when CNN started telecasting of gulf war in 1990s.

Business model of cable TV industry

The TV distribution platforms in India are terrestrial (owned by doordarshan), cable, DTH and IPTV.

The Indian TV distribution industry now comprises of 6000 Multi System Operators (MSOs), around 60,000 Local Cable Operators (LCOs), 7 DTH/ satellite TV operators and several IPTV service providers. The business model is undergoing a change in India. At one point of time, India had nearly 100,000 cable operators. The industry was run by small operators. The emergence of large operators from Hinduja group (incablenet), Zee group (Siticable), Asianet,  Hathway (Raheja group) and RPG group (RPG Netcom), who are now known as MSO (Multi System Operators) changed the way in which the industry is run.  But the MSOs are concentrated on the metros and major cities only so far. The industry is in the hands of local cable TV operators in the rural areas and small towns.

The entry of big players from corporate led to the consolidation of small operators.  This is because of the better quality of services offered by MSOs. While the local operators are able to offer around 30 channels, the MSOs are offering more than 65 channels to the customers. Besides, the MSOs are offering local channels which show films, local events, religious discourses, regional news etc. But all these MSOs operate on the model of franchising their cable TV feeds to the small operators.

The broadcasting business in India is primarily driven by two sources of revenue – advertising and subscription. There are two main types of broadcasting business models:


a. Free to Air (FTA) channels which rely on advertising revenue as their primary source of revenue, and thus are dependent on the distribution supply chain only to ensure reach to their target audience.


b. Pay TV channels which have a dual source of income from both subscription and advertisement. The channels need to ensure reach not just to earn advertising revenue but are also dependent on the distribution network to collect subscription revenue from the consumer.


The total revenue of the Indian television industry was estimated at Rs. 25,700 crore in 2009, of which advertising accounts for Rs.8,800 crore (34%) and subscription accounts for Rs.16,900 crore (66%). The average ARPU is Rs 165.


Conditional Access System

Conditional Access System (CAS) is a digital mode of transmitting TV channels through a set-top box (STB). The transmission signals are encrypted and viewers need to buy a set-top box to receive the signal. CAS was introduced by the Government in 2001 to control and monitor the cable operators and to improve the quality of services and control the tariff.  Initially CAS has been introduced in metros, but the penetration is only 25% so far.  The reason for the slow growth of CAS is due to the initial entry cost of STB. TRAI has recently recommended that all Cable operators should move from analogue system to digital system by 2013.

Regulatory and policy intervention

Cable Television Services were brought under Telecom Regulatory Authority of India in 2004.  TDSAT (Telecom Disputes Settlement Appellate Tribunal) is now available for settlement of disputes between broadcasters and MSOs /cable operators

Cable Act 1994 was amended in 2006 empowering TRAI to issue new customer friendly CAS Regulations.  TRAI issued three regulations in August 2006 to create a legal framework for smooth implementation of CAS.  These included a tariff order, interconnect and pricing regulation revenue share methodology and process and QOS regulation.

Key recommendations of TRAI

Restructuring of Cable Industry with a larger role for MSOs and Digitalization plan within five years
Head end in the Sky (HITS) policy to be announced by Government , TRAI completes all recommendations on this
DTH policy on tariff and Quality of  Services
New recommendations on FDI policy  in cable- upto74 % by TRAI
Internet Telephony allowed for ISP’s.
Cable Broadband focus with easier Right of Way ( RoW) and Wireless possibilities
Non CAS tariff regulations for TV subscribers
Cable Companies can provide IPTV. Recommendations cleared by Government. MSOs can consider this opportunity, marketwise
Ala carte choice of Channels by MSOs from  Broadcasters in non CAS
New Television Rating points (TRP), Television Audience Measurement (TAM) policy by TRAI.
MVNO policy announced
Greater emphasis laid on network digitization, increased addressability and to encourage voluntary CAS
Incentives prescribed to Multi System Operators (MSOs) to introduce total digitized networks
The registration for cable TV operator to be replaced by a comprehensive and supportive licensing framework
Separate licensing frameworks for Cable TV operators (LCOs) and Multi System Operators (MSOs)
Eligibility criterion made specific to identify the entities who can act as LCOs and MSOs
Option and flexibility to choose Service area given both to LCOs and MSOs
CAS extension to the remaining three metros and subsequently followed by digitalization of 55 cities within a span of 3 years ( with addressability)

New technologies

The viewers are increasingly demanding more features and better content from the TV channels and cable operators. These new technologies like PVR, video on demand, IPTV are revolutionizing the viewing experience. 

Personal Video recorder (Digital Video Recorder)

PVRs facilitate viewing of channel while simultaneously recording the programme running in another channel. PVRs allow the viewer to pause, re-wind and re-play live TV.

Video on demand

Video on demand allows viewers to order movies available in service providers’ library. The movies can be downloaded for a fee.  With more than 1000 movies produced in India, Video on demand offer lucrative business opportunity for the cable operators.


The current TV transmission in India is predominantly analog which does not allow any technological upgradation. Besides it results in huge revenue leakage for the Indian cable operators as the household gets more than one TV connected to cable and pays only for one connection. Besides the quality of analog transmission is very poor.  In the case of analog transmission, the operator cannot restrict the choice of channels to the customer. As a result, the cable operators pay for pay channels even if they are not required by the user. Digitalization leads to triple play where the customers get TV, broadband connection and telephone services from the same source. This will facilitate the cable operator to effectively compete with DTH and IPTV technologies.

Major operators

Last mile connectivity, technological up gradation and digitalization requires huge investments. The cable industry is moving towards consolidation in favour of triple play operators or Multi service operators. There are five major national operators in India. They are Hathway Cable, incablenet,  Wire & Wireless India, DEN and Asianet. They collectively access over 25% of the country’s TV subscribers. Competition in the cable TV segment has intensified as the corporates battle for acquiring the last mile connectivity. The recent acquisition of Digicable by RCom is a prelude to the shape of things to come in the merger and acquisition in the industry.

The industry is still fragmented and unorganized due to which it is not able to attract investment. The revenue estimate of the industry is not accurate and the industry is blamed for under reporting of subscriber numbers.  The cable TV sector will come under a proper licensing mechanism where city, state or national licenses can be bought. The TRAI recommendations are a big step forward in ensuring effective licensing compliance, digitization of networks and attracting investment.

The Way Forward

The cable sector is emerging as a very attractive space owing to the TRAI recommendations and the clear edge of digital cable over its competition like DTH and IPTV in offering a larger number of channels, greater reliability even in adverse weather conditions and easier access to cheaper after-sales and customer services. Globally, India is the third largest player in the cable TV space. Even though DTH Technology is emerging as a competition to Cable in India, globally Cable has been resilient to such technology and even in developed countries like US, Cable has a 70% market share within In-home Entertainment. Industry experts expect cable TV industry to consolidate and Corporatize in the near future, this will lead to economies of scale, higher efficiency and also easier access to capital.


The author can be contacted at . For more articles visit indiatelecomonline.com

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