Being carried by the optical fibre network, greater bandwidth will be available

Television: While Direct-to-Home (DTH) TV may be legalised soon, a study carried out by a local consultant for the Bhutan InfoComm and Media Authority (BICMA) suggests that improving and expanding the cable TV network by digtalising it and allowing local cable operators to also supply broadband internet is a feasible alternative.

The study, “Enhancement of cable TV in Bhutan: Its technology and business model” recommends digitalising the current cable TV system and consolidating all local cable operators under a single Multi System Operator (MSO).

The study recommends digitalising the cable TV system from the current analog one as it offers several advantages and opportunities for both the local operator and customer.

As a digitalised system will use  optical fibre cables, rather than the analog copper-based ones used by operators today, the bandwidth available for data transfer would be significantly higher. In theory, more than a thousand TV channels could be provided.

The higher bandwidth will also allow for better picture quality or high definition TV, more channels, movies on demand, interactive gaming, telephony and broadband internet, among others.

The study also points out that by offering such value added services, especially broadband internet, cable operators can increase their revenue and continue to survive. It is also pointed out that cable TV operators in the West have been able to stay in the business only because they began offering broadband internet.

Currently, the average revenue per person for local cable operators is one of the lowest globally. Besides that, the operators are also facing threats such as increasing use of DTH TV. The study also states that if DTH TV operators begin providing broadband internet, business of Bhutanese internet service providers (ISPs) like Druknet may also be threatened and therefore ISPs would also have to be licensed to provide TV channels.

Another reason for migrating to a digital system, the study says is that production of analog equipment may eventually stop. Bhutan is one of the last few countries where analog technology is used to distribute cable TV.

However, given the high costs of digitalisation, the study says that it may be financially impossible for smaller companies in the dzongkhags to make the transition. Some of the larger cable TV companies have already begun laying fibre optics for their core networks but still use copper-based cables to reach their subscribers.

But it is also pointed out that the government has created a national optical fibre network which is yet to be fully optimised. This network reaches all 20 dzongkhags and almost all the gewogs. The study recommends that the government review how the optical fibre cables are allocated, and that usage is not only limited to ISPs and that other ICT players, such as a cable TV operator, also be considered.

For a business model, given the high costs of digitalisation and the risk of assuming that they can continue to acquire and maintain customers despite improvements in technologies, the study recommends that local cable operators be consolidated into a single multi system operator (MSO).

Strong government support in the form of tax incentives, subsidies, and loans, is recommended but the primary support suggested is to allow the MSO to use the national optical fibre network.

The MSO would then obtain TV signals from India, as is the current practice, and provide them to the local operators. A source for internet and other value added services would have to be found.

However, the study cautions that a single MSO raises the risks of monopolistic behavior, but that opening the market to competition also risks business sustainability. Therefore, the study says that BICMA will have to play a close role in monitoring the MSO and ensuring that both the MSO and consumers are protected.

The report concludes by pointing out that Bhutan cannot leave the cable industry to market forces. It says that the small customer base, lack of technical expertise within the industry, and lack of awareness about the future of TV will only lead to an inefficient industry. There are already problems associated with cable TV such as non-uniformity of number of channels provided and quality of channels.

A BICMA official said that the recommendations of the report are yet to be implemented as it still has to be studied.

The report is available on the BICMA website. The study was carried out by iDruk consultancy.

By Gyalsten K Dorji

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