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Tuesday, June 12, 2012

Cable digitization may get delayed by 6 months:

Cable digitization may get delayed by 6 months:

A closed door meeting on digitization is expected to be held between I&B Minister Ambika Soni and the industry representatives at 3 pm today, reports CNBC-TV18’s Ekta Batra.
The meet would also include the task force constituted by the government to ensure timely execution of digitization, however sources indicate that six months delay is likely to be announced.
Who needs more time and why?
Cable operators are asking for a deferment of the phase one deadline on all the metros which ends on June 30, 2012. They are asking for a postponement by nearly six months because of the execution delays faced by them. This means many new MSOs are yet to convert to digitization because they are countering a lot of logistical inabilities, so they need this extension.
On the other hand, Broadcasters Association or NBA is asking for the deadline to not be delayed by six odd months, but to be extended maximum by 30-40 odd months. The blue sky scenario for the NBA would be that they adhere to the June 30 deadline and nothing changes on that front.
What if Phase-I gets delayed?
There is no real big problem if there is an execution delay and extra six months for phase one are given, but analysts feel that six months might be a bit too long. Analysts also feel that it should have been increased by a month and in a staggered manner because execution would then have been faster.
Post these six months, the cable operators might ask for another extension hence an overhang in terms of competancy to execute the process would remain. This would lead to delay in all the four phases.
Sun TV shines bright
Meanwhile, the Sun TV stock soared more than 6% during the day, but this rise may not be on the back of digitisation because their cable operations are private.
Broking firm ENAM has issued a report on Sun TV which is on the positive side and it is learnt that the company might be in final stages of negotiation with Arasu Cable at this point in time. These can be the possible reasons for this movement in the stock price.
When CNBC-TV18 spoken to the company during their earnings call, the management indicated that this could be done in as soon as a week. So, there could be some positive development on that front considering that their analog revenues were completely impacted by their fallout with Arasu Cable.


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