Stiff competition ahead – DTH vs ‘HITS’ Cable TV – FDI at 74% for HITS

We have more good news in the Indian Media Space. DTH may be the next Telecom Story of the country. But, it has one new competitor now. The Indian government has approved Information & Broadcasting (I&B) Ministry proposal on policy guidelines issued for Headend In The Sky (HITS) operators . This is in line with TRAI’s effort to move to High Quality media signal transmissions in the country.

HITS :

Headend In The Sky (HITS), is a digital distribution platform. HITS serves the whole country providing its signals through satellite to many Multi System Operator (MSO)/cable operators who can further send the signals to the customers using their network. The essential difference between a HITS operator and a Multi System Operator (MSO) is that the former transmits the bundle of channels to the cable operators using a satellite, whereas the latter does the same through cable.

HITS is a digital delivery mode of distribution of TV channel and it would speed up the process of digitalization of cable services located in Non-CAS areas of the country. HITS would not only help increase the penetration of cable market further into rural areas where it has been absent because of unviability but will also help in further reduction of prices of set top boxes and will also lead to further consolidation of the cable market.

HITS vs DTH :

1. DTH operates only on Ku-Band (Kurtz-under band). Whereas HITS is allowed to operate in both the traditional ‘C-Band’ as well as the Ku-Band’. The quality may be better on HITS transmitted channels as the Ku Band is vulnerable to rain which causes deterioration in signal strength.

2. As HITS relies on the existing and widely available Cable TV Network, there would be NO extra hardware installations and thus pricing are well lower than DTH’s.

3. Don’t worry about Pay per channel and other On Demand Services as in DTH’s. You cable operator can pull all available channel in the country and it will turn out to be lot cheaper (Economies of Scale) this way.

4. FDI cap for Cable TV Operators and DTH Providers is at 49%. Where as for HITS, it is now set to 74%. So, we can see many foreign players launching their brands in India. This can lead more competition in this TV Signal distribution space and we can expect prices to be slashed down as we are seeing in Mobile Tariffs

CAS ??

Recently I&B Ministry made Conditional Access System (CAS) a mandatory for MSOs. The news pushed share prices of companies like SunTV (which sell CAS) to upper circuits. Few days later, I&B Ministry reverted that order. With the present new guidelines, it is not compulsory for cable operators and MSOs to switch to HITS and they can continue with their existing system.

Well, the country is migrating slowly to Digital Transmissions and systems like HITS which are both cost friendly and high quality are real boon to the end users.