The Budget proposal to double import duty on set-top boxes may cost the users dear as the operators plan to pass on the burden to the consumer.
With the Finance Ministry’s proposal to increase import duty on these devices from 5 per cent to 10 per cent, the installation cost of a digital cable service may go up by roughly Rs 100 per connection.
Both multi-service operators (MSOs) and direct-to-home (DTH) companies are mulling over passing on the increased price of set-top boxes to the users. According to market sources, operators (both MSOs and DTH players) currently absorb nearly 30 per cent of the cost for set-top box per connection on an average. So, it would be difficult for the operators to bear further increase in price, they added.
“The burden of increased import duty on set-top boxes should ideally be passed on to the users. The increase on duties may lead to a rise in price by roughly Rs 100 a unit,” Anjali M Nanda, Executive VP, Marketing, Dish TV, said.
Finance Minister P Chidambaram said the proposal was aimed at promoting domestic production of these devices. However, according to Nanda, there are very few such manufacturers in India and they don’t have the requisite technologies.
According to Suresh Sethia, Director of Siti Cable’s Kolkata unit, the All India MSO Alliance will approach Chidambaram and seek a reconsideration of the hike.
“Digitisation has almost been completed in the four metros. It is the turn of smaller cities in the second phase and the users in these areas will have to bear the additional cost due to a hike in import duty,” Sethia said.