Cost Benefit Analysis Especially With Reference To Competing Technologies

Synergy between telecommunications and TV distribution can lead to better penetration. In fact, the rollout for telephony would be considerably cheaper because resources can be shared. This is important because the cost of external infrastructure for suburban and rural scenarios is exorbitant and has been an inhibiting factor so far in the growth of telecommunications.

Advantages And Disadvantages

The existing cable TV operators find it profitable to operate in densely populated areas, leaving the sparsely populated areas to other options. Either direct-to-home (DTH) satellite systems or LMDS/MMDS systems can fill in this void. The possible regulatory issues to be addressed are as follows: First, both cable and MMDS/LMDS systems would provide the regulatory authority to preview/censor un desired broadcasts/retransmissions as opposed to DTH systems using satellites. At this stage of development, the opportunity exists to get the option for DTH foreclosed, as already done by some countries in the Middle East.

Second, for example, the current business rules of the government of India do not permit the Department of Telecommunications (DOT) to do TV signal broadcasting. However, the DOT had been providing long-distance links as well as local end links to Doordarshan. Therefore, the provisioning of the medium would still fall into the domain of the public telecommunications operators, and they should lobby for change in the existing regulations. This is important because there would be stiff competition between cable and public telecommunications operators for this market if and when the same is opened up.

Third, the most promising frequency band for LMDS is 27.5 to 29.5 GHz, which is presently sparsely used the world over. Of course, satellite operators are eyeing this band for mobile and fixed satellite services. The FCC (in the United States) is likely to allocate 1 GHz of bandwidth each to LMDS and satellite services. The review done in the Test and Experi men ta tion Center (TEC) on the frequencies beyond 1 GHz also has recommended shared usage. An early resolution of this issue would be beneficial for long-term growth.

Expected deployment profile

Currently, there are 4.5 million subscribers in 70 nations all using analogue MMDS technology. For example, the TV market in India is projected to grow rapidly by the end of the year 2002 fueled by the following factors:

• TV advertisement to grow fivefold

• Number of TV channels expected in the range 70 to 85

• Number of TV households to increase by 10.4 percent

• Number of cabled households to increase by 6.9 percent

• Cable penetration to increase to 59 percent³⁶

The telecommunications market is normally bigger than the market for TV. In fact, in the United States, the household penetration is 64 percent for cable TV and 97 percent for telephony. This fact should galvanize the telecommunications operators into urgent action.

Already a number of operators in India have signed up for planning, installing, and operating extensive optical fiber networks for meeting the requirements of cable TV, viz., Hindujas, Siti, and BITV in Bombay, RPG in Calcutta, and United Breweries Group in Bangalore. The initial objective is to provide larger numbers of quality TV channels to be followed up by teleshopping, telebanking, videoconferencing, video-on-demand, and educational programs. Some of the operators (Globe Satellite Communications) also have realized the importance of LMDS/MMDS technology, and they have approached the Ministry of Information and Broadcasting.