The Indian media industry has seen unprecedented growth in the last three years and the face of the industry has changed with digitization, entry of DTH operators, and a strong thrust in the number of channels telecast. Many of these events have taken place as a result of enabling regulations and a pro-active policy structure unleashed earlier that enabled broadcasting from India at the turn of this century. The industry has come a long way since then and grown in size and stature to be at par with that in the developed countries. The Indian media industry is now truly at crossroads when it is set to leave the old analog transmissions behind, embrace convergence services, and migrate to a new environment of transparency, copyright protection, and providing services such as HDTV, mobile TV, broadband, and interactive services. All these ride on availability of key resources such as satellite capacity and an enabling and friendly policy framework.

Satellite scenario for India

At present, there is a shortage of transponders in India. Reasons for this are:

Vacation of lower extended C-band. First of all, in C-band, the government had taken a decision to allot the lower extended C-band to WiMAX services. This band has been mainly used by broadcasters and cable operators in India with over 100 channels operating in this band. Satellites such as Thaicom, AsiaSat, INSAT Yamal, and others have transponders in the lower extended C-band. In case of INSAT, the lower extended C-band forms a primary resource on all of its satellites. Owing to the need to relocate over 100 channels operating in this band, a crisis of transponders has developed in the regular C-band.

Launch plans of a large number of channels. The boom in media and other sectors led to a great rush by broadcasters to launch new channels in 2007 and early 2008. The expenditure on a new channel could easily be recovered through advertising and sponsored programs. Over 500 applications for such channels were filed with the Ministry of Information and Broadcasting. This led to all the C-band capacity being soaked up. Further, many of the existing channels sought carriage to overseas platforms requiring greater access to satellite capacity.

Multiple DTH platforms. A similar shortage developed in the Ku band with the launch of a number of DTH platforms such as those by Bharti, Reliance, and Sun TV in addition to existing platforms of Dish TV and Tata Sky. In addition, some other platforms are in the planning stage. This sudden growth in the number of users was coupled with cut-throat competition requiring each operator to launch several new channels. This has put considerable pressure on the availability of satellite capacity as transponders on all major satellites are now fully booked, including satellites to be launched in 2009.

Cable distribution platforms. The digitization of cable TV network is progressing rapidly even though the government has taken a back seat with CAS being put in cold storage. Operators such as Dish TV have launched a headend-in-the-sky (HITS) platform for Dish TV, while many others are waiting in the wings. Each such platform soaks up the capacity for full satellite, i.e., 12-16 transponders. Hence the crunch of satellite capacity for the great Indian cable and satellite (C&S) market will continue to keep the satellite market under pressure till 2012.

Need for back-up capacities. Most DTH platforms have now matured and grown to more than a million users, with Dish TV, the leader in the field, growing to over 5 million users. Such large ecosystems of customers, dealers, broadcasters, and distributors are now major businesses and need high degree of reliability and assurance of business continuity. Hence, all platforms are looking for back-up satellites to ensure that their businesses are intact. Requirements of back-up capacity are also driving up the demand of transponders in Indian market.

Need for new services. All major operators, whether single channel broadcasters or platform operators, are now getting ready for HDTV, which is expected to dominate the scene by 2010. HDTV requires networks to be digital and each channel requires at least two times the capacity occupied by a single SDTV channel. Moreover, a number of interactive services ranging from games to niche magazines on news, business, and weather are continually requiring additional satellite capacities.

The MPEG4 myth (MPEG2 versus MPEG4). Developments in MPEG4 technology have been rapid after its standardization under the ITU as H.264 and the cost of encoders as well as decoders has been falling steadily. All new channel launches are now under MPEG4 including those on DTH platforms. However, this has an impact primarily on the cost of transponders to be borne by operators. There is no tangible benefit for customers as the cost of MPEG4 decoders still remains much higher than that of MPEG2 decoders (typically USD 30 or Rs. 1500 for MPEG2 decoders versus USD 50 or Rs. 2500 for MPEG4 decoders). Being highly compressed, the loss of quality is much higher in MPEG4, under adverse weather conditions, than in MPEG2. This is owing to the fact that with a given error rate, much more data are lost in MPEG4 as the signals are highly compressed. This has led MPEG4-based operators opting for dish sizes of 80 cm against 60 cm for MPEG2 platforms.

There is considerable misconception that replacement of decoders of MPEG2 by MPEG4 is advantageous for customers. However, this is not the case. MPEG4, it must be recognized, is a compression technology and still uses MPEG2 transport stream structure for transmission. Moreover, the replacement cost, including cost difference between an MPEG4 and MPEG2 box and physical replacement expenses works out to over USD 25 (Rs. 1250) per subscriber. For a typical operator with 4 million customers, this is an expense of over USD 100 million (Rs. 500 crore). In comparison, for 120 channels, the savings on transponders will be just USD 3 million (Rs. 15 crore) per year. Hence it does not make any economic sense to replace decoders nor do the customers benefit in any manner. However, all future systems are expected to be in MPEG4, including those for HD.

Pooling resources for satellite transponders

There is a need for having a back-up transponder capacity on a pooled basis in India, which means that a number of operators may share the cost of a back-up satellite, which can be used in catastrophic failures. ISRO has indicated that they would be making a provision for back-up capacity as a part of their satellite capacity planning program.

Regulations and efficiency

Indian DTH industry is at present governed by regulations that mandate the use of Indian satellite capacity. ISRO has been quite proactive in this regard by leasing capacity on foreign satellites and declaring such foreign capacity as Indian capacity for regulatory purposes. Some of the DTH operators, based on such a practice, have signed on foreign satellites or transponders on future satellites. There is a need for changes in satcom policy, which enables operators to arrange capacity in the Ku band as is the case for C-band.

There is also a need for generating greater efficiencies in the system for the benefit of India as a country. At present, a potential broadcaster needs to book satellite capacity and then apply for an uplink or channel permission. During this process, which may take up to six months, the capacity remains idle. A pipeline of 400 channels awaiting permissions means more than 24 transponders (equivalent to two satellites) being kept on standby, but paid for, before services can begin. A similar situation prevails in case for DTH or HITS platforms. The regulatory system in the country is so designed that everybody must lose money. There is a need that the channel or uplink permissions (which are based on the channel content of the broadcaster or of the platform operator) should be kept separate from satellite capacity. Those successfully getting a license should be able to apply for and get capacity on any satellite and present it for WPC approval. This will save every broadcaster or platform operator 6-12 months of satellite payments which benefit only foreign satellite operators.

Further, changes in operating satellites or dual beams need to be handled in such a way that these are awarded simple and fast permissions through WPC rather than through a prolonged and contrived process of multiple agencies. These simplifications will enable the industry to use satellite capacities more efficiently, have a better bargaining position with foreign operators, and reduce the present environment of all round shortages.

Pioneering role of ISRO

The shortage of capacity in India is no reflection to capabilities of ISRO. The pioneering role played by ISRO has been highlighted by its successful construction and launch of W2M satellite in cooperation with EADS Astrium in December 2008 and its plan to construct another four commercial satellites for its international customers in 2009, not to speak of its launch capabilities displayed in the Chandrayaan mission. It has launched over a dozen satellites over the last decade toward serving the media industry. However, it is restrained owing to actions, which have divested it from the traditional INSAT C-band as well as the S-band for other applications.

Policy framework

The current policy framework for services such as DTH and broadcasting is steeped in perceptions about these platforms, which prevailed a decade back. For example, DTH operators are not allowed to provide broadband services, interactive, or value added services. In contrast, most DTH platforms today provide a very rich environment of value-added services. Terrestrial broadcasting, the framework for which had been prescribed by TRAI in 2005, is still to come to the stage of licensing. The 700 MHz spectrum lying vacant is now attracting attention of wireless and WiMAX providers on the lines of potential auctions of 700 MHz in USA. This is also leading Prasar Bharti, being the sole organization, to deploy public funds in terrestrial digital services. Quite in contrast, experience has shown that licensing of terrestrial radio has brought a new lease of life to radio services in the country and such services are key to the mobile population. Mobile TV recommendations, issued by TRAI in 2008, are similarly awaiting a licensing nod.

The government, despite knowing the urgency of digitization for the country and specific recommendations of TRAI in this regard, has given insufficient attention to the needs of platforms such as headend-in-the-sky (HITS), whereby broadcasters are able to circumvent carriage of their channels on such platforms. Digitization in various countries has been taken up with the importance it deserves in most countries. In the US, ATSC decoders were provided free to all customers by the government.

Time is now ripe for a new range of coordinated policy initiatives, which will have the thrust to enable the media industry in India to be the next sunshine sector.