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October 23 2007
NDS Group sees digital pay TV in India grow slowly
Reuters News
(c) 2007 Reuters Limited
MUMBAI, Oct 23 (Reuters) - Israel's NDS Group Plc expects consolidation in India's fragmented cable television industry and favourable regulation will be needed to popularise digital pay TV, a senior company official said on Tuesday.
The U.S.-listed firm, which provides technology to digital pay TV operators and content providers, has said it was keen to launch Internet Protocol TV in India, but even digital TV penetration remains low, at just over 1 million cable TV homes.
India is the world's No. 3 cable TV market and is set to become Asia's most lucrative pay TV market by 2015.
But controls on pricing and delays in the rollout of a pay TV system have hamstrung the introduction of new technologies in an increasingly crowded market. The total number of channels on air is set to hit 700 by 2009, more than double the current number.
"There is no dearth of content in India, but there is no great incentive for switching to digital," said David Godfrey, operations director - Asia Pacific, NDS.
"There is still money in analogue for broadcasters and advertisers, and consumers may not fully understand the benefit of digital," he said, at the launch of a technology which can help cable operators migrate to India's pay TV system.
NDS, a subsidiary of News Corp , employs more than 750 employees in India, most of them in its global research and development centre in Bangalore that develops interactive applications, games and other services.
Cable TV distributor Hathway Cable and Tata Sky, a direct-to-home (DTH) satellite venture of the Tata Group and News Corp, are its clients in India.
While falling prices of televisions are helping consumers switch to digital pay TV in Asia, India still lags markets like China, which is forecast to have nearly 22 million digital cable homes in 2007, according to research firm Media Partners Asia.
In India, the expansion of DTH will also help, Godfrey said.
"When DTH starts getting popular, that's the trigger for cable operators to wake up and provide more services," he said.
India will have nearly 5 million DTH homes in 2007, Media Partners estimates. Tata Sky competes with Dish TV and state-owned Prasar Bharti's venture.
Other firms, including broadcaster Sun TV and mobile operators Bharti Airtel Ltd and Reliance Communications Ltd are also launching DTH services.
"The hardware is available, the technology is available, but there has to be a right mix of ingredients, like consolidation in distribution market and regulation," Godfrey said.
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