India's 150 million-home digital switchover begins

Watching TV Commercial break: To stop TV screens going blank Indian viewers in big cities must go digital

Digitise or go dark - that's the message the Indian government has been sending out to millions of television viewers across the country.

Technology of Business

From television advertisements to text messages, people in the four metro areas of Delhi, Mumbai, Calcutta and Chennai are being repeatedly reminded that India will go digital from 1 November 2012.

This is the first phase of the Indian government's plan to digitise the country completely by December 2014.

India is one of the world's largest television markets, but the cables that take television signals into homes here are mostly analogue.

But new legislation - the Cable Television Networks (Regulation) Amendment Bill, 2011 - says all cable TV operators must transmit TV signals in an encrypted format, through a 'digital addressable system' (DAS).

This is forcing viewers to switch to either watching television via a set top box from a cable operator, or a satellite dish - known as a direct-to-home service.

WATCH: The BBC's Shilpa Kannan meets those affected by India's digital switchover

Forced purchase

Jitendra Ghosalkar lives in Jogeshwari in Mumbai and has been a cable customer for many years.

Like most of those affected, digital switchover for Mr Ghosalkar will mean buying a set top box. But this costs between $18 and $20, and that's a price he'd rather not pay.

"We are not being given a choice," he says.

"The government is forcing us to buy set top boxes whether we want to or not. It's unfair as we have to pay an additional cost."

But why go digital?

Broadcast equipment Digital switchover means huge amounts of equipment need to be replaced by broadcast companies

For subscribers, it will mean more content. According to the government regulator, TV viewers will get a minimum of 100 free channels, at a maximum price of Rs100 ($2).

Beyond this, subscribers can access movies and other channels on demand.

For TV stakeholders, there are good commercial reasons why the switch to digital needs to happen.

Switching means greater transparency. The government, operators and broadcasters can get accurate figures of just how many people watch television, and exactly what are they watching.

Be prepared

Companies like Incable have been preparing for this switch for years.

They are one of the largest distributors of cable television signals and have hundreds of small local cable TV operators working for them.

Installing new equipment Companies have spent many months and even years preparing for the switchover

In their main control room in Mumbai, they've had to install new equipment - called 'digital headends' to download signals transmitted by broadcasters to satellites.

The change in technology means that from just under 100 channels at present, operators will be able to provide up to 1,000 channels.

These are then sent to local cable operators who connect with the customers.

Going digital means a big boost in revenues.

"Now, we are not sure of number of consumers," says Madhav Betgeri, of Incable.

"Post-digitalisation, every television needs a set top box. Once a set top box is installed, we are sure that a customer is active and we'll start charging as per his demand."

One complaint has been that local cable operators often under-report subscriber numbers to avoid passing on fees and paying government taxes.

A recent report by the Federation of Indian Chambers of Commerce and Industry said that cable operators declare only 15% to 20% of their subscriber base.

The bigger benefit will be to broadcasters who currently depend mainly on advertising for their revenues. Once digitised, cable operators will be forced to share their revenue collection.

Look to the skies

For those who can afford it, direct to home (DTH) is the other option.

Satellite dishes India's television owners have the option of buying a set top box or having a satellite dish installed

Here, viewers get a small satellite dish on their roof and a set top box inside their homes.

India has more than 150 million homes with television, of which 25% have DTH and 51% receive cable TV. But DTH operators think their numbers will go up as digitisation will result in a more level playing field.

Shashi Arora is the chief executive of Airtel DTH.

"Any cost lopsidedness will now get equalised," he says.

"We pay higher fees as licence cost and taxes to the government. Also from the content cost perspective, we pay full cost to content across genres whereas cable TV companies pay much lower charges.

"This ambiguity will hopefully go away."

Installing a satellite dish Satellite or direct-to-home operators think digitisation will mean a more level playing field and more subscribers

Digitisation could cost as much as $5bn according to some estimates. India recently opened up the sector to attract more capital to help fund this.

Under new rules, foreign companies are now allowed to own 74% of Indian cable and satellite TV operators, up from 49% previously.

Nearly 50,000 set top boxes are being sold every day across India's cities. As the country rapidly turns digital, the government says this is just the beginning.

Once the bandwidth is established, the network can be used for anything from providing more content to giving internet access via television sets.

A rich future that the government believes is worth a small investment by viewers today.

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