Trai, consumer groups need to do some homework on the economics of their insistence
It sounds very nice. In June this year, Dish TV – a direct-to-home (DTH) operator owned by Subhash Chandra’s Essel Group – plans to launch Conditional Access Modules (or CAM) Cards. If you are an irritated Tata Sky subscriber, you can buy a card for about Rs 700, insert it in your Tata Sky set-top box and get Dish TV’s signals.
You will, however, not get Dish TV’s or Tata Sky’s Electronic Programming Guide or EPG, the basic text that helps you navigate the labyrinth of channels on offer. All you will get is the signal for various channels. And, you may not get all the channels. DTH operators send signals for different channels from different transponders — all the Sony channels may be on one transponder and all the STAR ones on another for Dish TV and Tata Sky. If you want all the channels, you either have to reconfigure the box or install another dish.
The technical issue
This is not because Dish TV is launching a bad card, but because this is the nature of technical interoperability in DTH. If Tata Sky launched a CAM card tomorrow, this would be equally true for it. Encryption technologies, which are at the core of safe TV transmission, are different by definition. This ensures they can’t be pirated easily.
A CAM card is a key that unlocks signals being sent out by another operator, but that is all it does. It can only unlock signals. There is a whole lot of stuff (middleware) that sits in the set-top box’s memory, like the EPG you will not get. The memory card is the property of the DTH operator, just like the phone SIM card. If you don’t want the operator’s service, why would you want his EPG or other services?
This is just one of the real, consumer-level problems of interoperability. There are several others in a market like India with six operators, huge by any standards. For instance, all the operators are on different compression technologies. So, even if they all had CAM cards, they wouldn’t all work on each other’s boxes.
“There is no one CAM module to decrypt everyone’s signals. So, we should be selling five different CAM modules,” says Tony D’Silva, CEO, Sun Direct.
“Practically speaking, a CAM slot in the box is a worthless feature,” says Dinyar Contractor, editor, Satellite & Cable TV magazine.
Yet, the regulator is fixated on it and so are some consumer organisations. In a paper on the subject, the Telecom Regulatory Authority of India (Trai) has ruled out most of the industry’s objections to the mandatory technical interoperability. According to reports, in 2009, Consumer Online, a trust, filed a complaint with the Competition Commission of India (CCI). A mail to the managing trustee bounced back and its numbers are not in use, so it is not very clear what this trust is and its motive in filing this complaint.
In response to this complaint, the CCI issued showcause notices to all DTH operators earlier this year. Most operators are preparing their response. Going by the Bureau of Indian Standards’ norms, all operators are interoperable. In reality, they aren’t, because nobody is selling CAM cards. That is what prompted CCI’s move. It also explains to some extent why Dish TV chose to announce it would be launching cards. Maybe some of the others will, too.
Salil Kapoor, COO, Dish TV, hopes this will be a game changer. He is betting that he can cash in on the churn of other operators, without investing in consumer acquisition.
Tata Sky CEO Vikram Kaushik doesn’t agree. His point is that, in an intensely competitive market, the consumer is getting a connection at very low prices. So, where is the demand for CAM cards? “A CAM card will cost at least Rs 900, plus a recharge of Rs 160 a month. Why wouldn’t a subscriber opt for a new operator instead? (a new connection comes for about Rs 1,100 onwards),” he asks.
“Sun Direct is offering free boxes. So, where is the question of interoperability?” asks Tony D’Silva, CEO, Sun Direct.
Recalling the 2003 law
Many of the large operators say they would prefer ‘commercial interoperability’. That means: Let consumers rent the box. They can return it and get their deposit back and shift to another operator if they are unhappy. But, the reasons that hold back ‘technical interoperability’ also hold back commercial interoperability.
Since set-top box prices are so low, it makes no sense to offer these on lease and fix EMIs (equated monthly instalments). This just pushes up the transaction cost, which, again, the consumer will bear. So, while DTH operators should be offering the lease option to subscribers, most don’t.
In cable TV, on the other hand, commercial interoperability is mandated, though technical is not. But, just like in DTH, it doesn’t work that way on the ground (This reporter did not get her money back for two boxes).
Most operators, however, agree consumers should have the choice. But, regulation and competition have already made DTH a highly commoditised, dog-eat-dog market. There is enough competition within operators and with cable TV. Consumers are better placed than they ever were when cable was the only means of getting TV. That is the reason DTH has been successful in India.
Now, after 20 million subscribers have signed on, insisting on technical interoperability will cause a system paralysis of the kind the CAS amendment to the Cable Act caused in 2003.
The comparisons with overseas markets make no sense, too, say operators. Unlike India, in most large DTH markets – say UK, Italy and Brazil – content exclusivity is allowed. That means, for instance, Tata Sky can pay a premium and acquire rights to, say, the IPL or HBO and sell it. So, if a Dish TV subscriber wants to see the IPL, he buys a CAM card to decrypt the IPL signal and watch it.
Remember, these are very mature markets where pay TV is an old idea. More important, they are smaller markets, with one or maybe two DTH players each, at most. So, technical interoperability doesn’t involve the same cost and complications that a market with 134 million TV sets and six players does.
In India, legally, a DTH operator can’t offer you exclusive channels or cricket matches. The only weapon he has in the battle for consumer acquisition is service quality. Technical interoperability attacks the heart of his business.
Why, then, is everybody surprised that most are resisting it?
