The next two phases of digitisation of television (TV) distribution, which is likely to extend upto fiscal 2018-end will benefit the television sector, says Crisil in its report.

Crisil points that stake-holders would stand to benefit by Rs 14,800 crore.  Of this, direct-to-home (DTH) operators are expected to garner as much as Rs 3,300 crore while multi-system operators (MSOs) are expected to receive Rs 1,500 crore. Broadcasters are estimated to receive Rs 3,900 crore

The report points that the incremental tax revenues of Rs 6,100 crore are estimated to accrue to the government, thanks to increased disclosure of revenues by local cable operators (LCOs) and increase in overall subscription base.

Of this, around 80 per cent will accrue to the central government through licence fee and service tax, and the rest to state governments through entertainment tax. Crisil estimates that given their already stretched balance sheets and high capital expenditure (capex) requirement in these phases, MSOs will be able to garner only 45 per cent of the incremental digital market in the next two phases of digitisation.

The balance will go to DTH service providers. This is in contrast to the previous two phases of digitisation wherein MSOs garnered 67 per cent of incremental digital market together with LCOs.

DTH’s upper hand in ‘cable-dark’ and sparsely populated regions will aid its market growth. And while incremental revenues will be on similar lines for both, profit share will be significantly more for DTH firms as they have complete access to subscription revenues unlike MSOs, which share a large part of their revenues with LCOs. 

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