From July 15, the cable operator will not be the villain he has been for the last five years.

Ashok Mansukhani, executive vice-president, corporate services, Hinduja TMT (parent of INCableNet, the largest MSO in Mumbai), is a no-nonsense professional. "If we started preparing for CAS almost a year ago what prevented the broadcasters (read pay TV broadcasters) from doing some internal strategising earlier? They seemed to have woken up only in April," he says about the nth hour preparations by players on the other side of the ring.

Conditional access is uppermost on his mind, and, not surprisingly, "broadcasters" come under a volley of attack when one speaks to him. "If CAS does not happen on July 15, there will be chaos," he says.

A veteran at Hinduja, 53-year old Mansukhani has dabbled in journalism and was an Indian Revenue Services officer (from 1975 to 1992) before taking the plunge into media in 1996 as COO of IndusInd Media and Communications, which runs INCableNet. In between, he served as deputy director general and internal financial advisor at Doordarshan (from 1992 to 1996), and, since joining Hinduja has been associated with the group in various capacities.

In 2000, he moved as head of sister company IndusInd Entertainment, which runs the INMumbai cable TV channel, and, has been at the helm of corporate services for the group for the last two years. In this interview to Viveat Susan Pinto of agencyfaqs!, Mansukhani comes to the heart of the matter regarding CAS and speaks at length about the issues rankling MSOs and cable operators.

Edited Excerpts

Our preparations for CAS began almost a year ago when we set up a task force under KV Seshasayee, who is the chief technology officer of the group. He, in turn, has recruited about 70 senior professionals who come from varied backgrounds - technology, telecom etc. This task force has been consistently at work, and, it was in about August last year that we issued a global tender for all the technologies we wish to bring in. After conditional access was notified in January 2003, we finalised our decision to go in for a digital cable service and in fact, have been leaders in this. We have tied up with Nagravision of Switzerland, a leading player that covers more than 35 million homes worldwide, for, conditional access technology. We are currently sourcing boxes from Germany and Taiwan and hope that Indian manufacturers will come up to the standards we require to be able to procure indigenous boxes.

The subscriber management system comes from Magna Quest in Hyderabad, a well-known subscriber management provider abroad, which is now providing its technology in India. Apart from this, we have also put a SAP (IT software) package in place and we are putting up a call centre as well. We are doing everything possible to ensure that the quality of service is the highest in the world. We were the leaders in announcing that there would be 70 channels for Rs 72 for F-T-A (free-to-air) customers. We have also announced a Re 1 per day rental scheme with Rs 999 as deposit.

Traditionally, INCable has led the market in technological change. More than three years ago, we brought in fibre-optic cable as a means to improve the quality of service, even in the analog mode. We put up a fibre-optic trunk line right from Mira Road in north Mumbai to Navy Nagar in south Mumbai, pioneered the centralised head-end concept, which means that all signals all over the city are available through one centralised head-end. This we did prior to CAS being a law of the land, which would enable us to provide the CAS service within the notified date.

For CAS though, we have decided to keep another digital head-end, which is coming in from Norway, serving about 150 channels and will be largely used for pay channel customers. The boxes we source will help a person with a black & white TV set to see all the 100 channels. He doesn't have to buy a new TV set. Someone may have an old colour TV set that does not have a 100-channel capacity. Again, by using the remote control of our box, he can see all the channels. The ultimate aim is to provide value-added services or VAS, that is, premium pay per view channels, content on-demand, events on-demand, live events, movies etc. A whole series of services, in other words. The smart card by Nagravision will enable us to provide these services in a very short period of time.

We believe that customers will not need to buy a new box for the next five to seven years. We have cut out analog technology because it does not exist anywhere in the world. We are only getting digital technology.

As far as the Bureau of Indian Standards goes, it has laid down certain guidelines that box manufacturers and cable operators need to adhere to. There is no provision in law that the BIS will approve a box before it is placed in a household. It has fixed certain technical parameters, which have been adhered to, by us.

We have a team of 1,000 operators who will be our customer service agents, supplying boxes to their customer bases. We will be supplying boxes to our bases directly; otherwise it will be through the local mile operator (LMO).

The subscriber management system will be a complete record of all the channels viewed by the customer. The smart card in his set-top box will record everything he views. The smart card system will be linked to the subscriber management system. We will encourage pre-payment of subscriber revenue by bringing in pre-paid cards. We want to cut out the present cash system of working. We will encourage our customers to pay their amounts in ATMs of banks as well as in other forms where there is a record of what they pay. The billing of the customer will be complete. In other words, he will know what he saw, what he opted for and what he is being charged for. There will be complete transparency as far as pay channel bases are concerned.

The cable operator has never fixed the total monthly bill. Even today, the cable operator is not charging more than Rs 70 for the entire service. It is the broadcaster who is charging Rs 235 for 35 channels. This is a question you should be asking the broadcasters. There is nothing that the cable operator has to say to this. If broadcasters are wise and sensible, they will reduce their rates immediately because that is what customers as well as the Government wants. If the Government has been indicating any figures, it needn't indicate it to us. It has to indicate to them (that is, the broadcasters).

Under Section 4A of the Amendment to the Cable TV Network Regulation Act passed in December 2002, the cable operator will not fix the cable bill in future. The Government fixes the F-T-A rate and the pay channel rate has to be determined by the broadcaster. Therefore, the cable operator is nothing but a master distributor of signals. He does not decide and will not decide and hopefully from July 15 will not be the villain, as, he has been for the last five years.

It has to be resolved. Either the law of the land prevails or broadcasters must go off-air. The law has been stated on December 31, 2002. Subsequently, it issued a notification on January 14 with a second one on June 6. Thereafter, the Government issued a written warning to all MSOs on June 19 that if pay broadcasters do not indicate a la carte pricing, if they engage in illusory pricing or in bundling then those channels will not be allowed to be on-air on July 15. The ball is in the court of the broadcasters. There is nothing much that cable operators and MSOs can do in this regard except hope that the meeting today (June 30) will be the final meeting between the Government and pay broadcasters.

The investment is in the region of Rs 100 crore for the two cities of Mumbai and Delhi. We have branded the service INDigital.

Payment problems with broadcasters are non-issues as far as we are concerned. We believe that broadcasters are extremely unhappy about the fact that India has an independent cable MSO who is not linked to any player. We have always resisted the unnecessary price hikes by pay broadcasters. In the last four years, prices have increased by 400 per cent. We have countered them on the basis that they have been trying to collect - indeed, extort money - from the cable operator when customers are not willing to pay for channels they are not actually viewing.

INCableNet, in fact, took the lead in trying to ensure that conditional access, which is followed in 90 countries across the world, is also brought to India. Even today we are being targeted by the broadcast cartel consisting of the three major companies who switched us off in April alleging that there was non-payment, whereas actually, in most cases, payments were either up-to-date or within the normal credit period and it is they who came back on to INCableNet because we cover a majority of Mumbai and have a significant presence in Delhi. We have no payment problems. The pay broadcasters do. They want to keep on hiking their prices. Customers are not willing to pay and we have absorbed the increase in price, which we will continue to do so. However, we believe from July 15 when conditional access sets in, the customer will be empowered to select channels of his choice.

I don't see how the price can be reduced further simply because there is a huge subsidy we are taking into account to bring in this technology. We are not in the business for charity.

I don't see why we should give out this figure if competition isn't giving out theirs. As far as we are concerned, we are ready to supply as much as the perception of demand.

The perception of demand is that between 25 to 30 per cent will accept boxes on day one. Nowhere in the world do we have a 100 per cent deployment of boxes.

We have given a list of about 73 channels to the Government. It is the maximum number of F-T-A channels being offered by any MSO anywhere in India for Rs 72.

It is a non-issue completely. These are bogeys that broadcasters raise at every stage. I would like to know in which case carriage is being paid to cable. Legally, is there a bar against charging carriage for cable? If broadcasters were worried about carriage, would they like to share their ad revenues with us? This is purely a business view. If there is a legitimate way of charging carriage, I see no harm in it.

We have not made any such application. We will do so when the business circumstances so desire.

As far as I am concerned, if CAS does not happen then chaos will happen. The entire effort in the media has been to say that CAS is equivalent to chaos. What we have told the Government is that if CAS does not happen on July 15, chaos will occur. For the simple reason that we will go back to an era of blackouts, blackmail and extortion by broadcasters. Above all, rates will shoot up beyond the existing price.

Today, when the political class says that CAS should not lead to an increase in the cable bill, our answer is, the cable operator does not fix the cable bill. When it talks of an increase in the cable bill what it needs to do is be very tough with broadcasters. However, if the political class is of the opinion that the law does not permit it to be tough with broadcasters, then it needs to ensure that broadcasters are at least brought around for an invitational pricing for six months so as to usher in the service. Ultimately, everybody benefits from CAS including the Government, which would get a 500 per cent increase in entertainment, service and income tax. Everybody should have a stake in the technological and orderly growth of this industry, which reaches almost every home in the country.

There is a large number of Mumbaikars who do not want pay channels. We are beginning to see this ground swell happening in many colonies in Mumbai where the building secretaries and residents tell us that they are not interested in seeing channels of the type they are watching under the pay regime. There is this somewhat large number present who want only F-T-A channels at a competitive rate and are happy getting 70 channels for Rs 72.

Then are these pay TV customers who want the right to decide what they should buy of a menu card. Currently, the broadcaster is forcing the menu-card on the customer and saying, "You shall pay whether you watch the channel or not." Hence, the primary benefit of CAS is that the viewer will decide what he or she wants to see, buy a bouquet if he or she wants to buy, and pay only if he or she wishes to pay. Empowerment of the customer to tailor his cable bill is the primary benefit of CAS.

Moreover, because the broadcaster will now have to hustle to get a customer, the quality of content will get even better, more relevant to the Indian context with the result that the pricing of channels will be more competitive because India is essentially a value-for-money market.

It is the broadcasters who took up this whole issue of CAS two years ago. They complained that there was massive under declaration and conditional access is something they are comfortable with like it is 90 countries of the world. They indicated then that they wanted complete declaration of their viewership base.

The Government set up a task force consisting of broadcasters, cable operators, MSOs and consumers. The task force submitted its report two years ago subsequent to which the Bill was passed in parliament in December 2002, and, in January 2003, the Government set up another implementation task force, which is working to roll out CAS on July 15.

The biggest benefit to broadcasters is that they will now have the full declaration of their viewership base. They will be able to charge a customer bearing his needs in mind. Ultimately, after an initial fall in advertising, which could happen due to the uncertainties of having introduced a new technology, they will benefit from both subscribers and advertisers. Their advertiser base could get niche, which means greater value for every second of advertising and subscription revenues will at least double - if not more - straightaway.

MSOs will gain because they will get a legitimate right in the value chain. Currently, MSOs earn nothing out of pay TV.