Set-top boxes for Rs 1,000 soon

A digital set-top box can be yours at one-third the price you pay now. Indian manufacturers like Bharat Electronics, and TVS are likely to manufacture set-top boxes for less than Rs 1,000.

A digital set-top box is a technology interface required for encrypted television signals for conditional access system (CAS) and direct-to-home (DTH) services.

Currently, the bulk of set-top boxes being supplied in India for CAS or DTH services are being imported and cost Rs 2,800-3,300. However, the government is planning various incentives to encourage Indian companies to manufacture them.

The government is expected to re-impose Customs duty on imported set-top boxes and slash the 13 per cent countervailing duty currently being charged on all components required in a set-top box could be slashed by less than half.

"If the 13 per cent countervailing duty and the 16 per cent duty on plastic products for the front panel is brought down or removed, it will help the support industry provide cheaper components. This will drastically reduce the retail cost of set-top boxes," said Vineet Wadhwa, chief technical officer at Logic Eastern, a set-top box manufacturing company told Business Standard.

"If Customs duty is levied on set top boxes, the cable industry will look inward, which will encourage local manufacturers to produce digital set top boxes," said Suresh Khanna, secretary general of Consumer Electronics and TV Manufacturers' Association.

Imported set top boxes invite an aggregate of 35-37 per cent duties, which makes the retail price of these boxes over Rs 3,000.

Companies like Flextronics, Alcotech, and Kortek had all got the surface mount technology required for manufacturing set top boxes and if the government provided a conducive environment, Indian set top boxes would be produced at a lower cost, Wadhwa said.

The Consumer Electronics and TV Manufacturers' Association has also recommended imposition of Customs duty on imported set top boxes.

"South Korean companies are setting up manufacturing bases in China for making set top boxes, which are then exported to India. To consumers, they cost around Rs 3,000. With CAS expansion planned, Indian manufacturers should get into the manufacturing of digital set top boxes in a big way and then they will cost less than one-third," said Ashok Mansukhani, president, Multi System Operators Alliance, and executive vice-president of Hinduja TMT.

Cable operators, set top box manufacturers and multi system operators are meeting officials from the information and broadcasting ministry and the Telecom Regulatory Authority of India on February 1 to chalk out the next phase of rollout of CAS, which is also linked to the government's goal of converting the analogue mode of television transmission in the country to digital by 2010. This meeting would probably outline steps to boost local manufacturing of set top boxes, an industry source said.

According to the estimates of the Consumer Electronics and TV Manufacturers' Association, by 2010 there will be 120 million TV sets in India, of which 40 per cent will be black and white.

"A set top box will be a must for watching digital quality pictures and without local manufacturing, the prices of set top boxes can never come down," said Khanna.