1 Explosive Growth of Media Enhanced Consumer Choice- Enhanced Consumer Choice- need for convergent regulation need for convergent regulation

2 Explosive Growth of Media need for convergent regulation “Today as we enter the second digital revolution, the long heralded revolution has begun aided to the altar by the rise of the ever faster broadband connections and more efficient compression technologies and driven by powerful competitive forces that are now reshaping the communication landscape. “Today as we enter the second digital revolution, the long heralded revolution has begun aided to the altar by the rise of the ever faster broadband connections and more efficient compression technologies and driven by powerful competitive forces that are now reshaping the communication landscape. “The telecommunication network is the nexus for convergence of TV with the internet and the next generation of digital video service. “The telecommunication network is the nexus for convergence of TV with the internet and the next generation of digital video service.

3 Explosive Growth of Media need for convergent regulation “Telephone lines that once carried merely voice communications are now able to provide broadband, data services capable of delivering both live and on demand television programmes in standard and high definition formats through set top boxes connected to TV screen as well as PC and other devices. “Telephone lines that once carried merely voice communications are now able to provide broadband, data services capable of delivering both live and on demand television programmes in standard and high definition formats through set top boxes connected to TV screen as well as PC and other devices. “Exploiting the full potential of digital delivery this new form of distribution will fundamentally affect the way TV is viewed change channels of distribution and disrupt the traditional broadcasting business as the “Exploiting the full potential of digital delivery this new form of distribution will fundamentally affect the way TV is viewed change channels of distribution and disrupt the traditional broadcasting business as the

4 Explosive Growth of Media need for convergent regulation Conventional boundaries of telecommunications and television industries collide and collapse. Conventional boundaries of telecommunications and television industries collide and collapse. “The choice of channels and programmes will further explode as viewers roam beyond their national borders of broadcast TV and access live and recorded programes around the world reflecting their interest “The choice of channels and programmes will further explode as viewers roam beyond their national borders of broadcast TV and access live and recorded programes around the world reflecting their interest “Viewers will further benefit from increasing control watching what they want, when they want, where they want and on a device of their choice.” –Informitv Consulting “Viewers will further benefit from increasing control watching what they want, when they want, where they want and on a device of their choice.” –Informitv Consulting

5 Explosive Growth of Media need for convergent regulation The FICCI-Frames Report by Price Waterhouse Coopers for 2007 expects the Indian media and entertainment industry to grow at 18% CAGR to reach Rs. 1 trillion by 2011 The FICCI-Frames Report by Price Waterhouse Coopers for 2007 expects the Indian media and entertainment industry to grow at 18% CAGR to reach Rs. 1 trillion by 2011 Television segment will grow by 22 per cent from Rs 191 billion to Rs 519 billion by 2011 Television segment will grow by 22 per cent from Rs 191 billion to Rs 519 billion by 2011 With CAS/DTH/IPTV making an entry in metros in 2007,subscription revenues will be the key driver of TV revenues benefiting from increased number of pay TV homes as well as increased subscription rates. With CAS/DTH/IPTV making an entry in metros in 2007,subscription revenues will be the key driver of TV revenues benefiting from increased number of pay TV homes as well as increased subscription rates.

6 Explosive Growth of Media need for convergent regulation “ The dawn of digital TV broadcasting will enable optimization of scarce spectrum “ The dawn of digital TV broadcasting will enable optimization of scarce spectrum This will lead to provision of additional forms of distribution like new TV channels; enhancements like mobile TV reception/HDTV/IP based TV and introduction of new convergent multimedia services and new applications such as 3G This will lead to provision of additional forms of distribution like new TV channels; enhancements like mobile TV reception/HDTV/IP based TV and introduction of new convergent multimedia services and new applications such as 3G “With digitization of content and entertainment it is now possible to bridge the digital divide effectively bringing in triple play and using the home TV or mobile phone as the bridging device.”-Subgroup on Going Digital-Planning Commission “With digitization of content and entertainment it is now possible to bridge the digital divide effectively bringing in triple play and using the home TV or mobile phone as the bridging device.”-Subgroup on Going Digital-Planning Commission

7 Explosive Growth of Media need for convergent regulation The last ten months have seen intensive competition between digital CAS and DTH. IPTV has made a slow start.Most importantly customers have finally got choice of different digital platforms The last ten months have seen intensive competition between digital CAS and DTH. IPTV has made a slow start.Most importantly customers have finally got choice of different digital platforms Reduced ARPU of telecom companies has led them to look to providing video content on telephone lines and mobiles to customers Reduced ARPU of telecom companies has led them to look to providing video content on telephone lines and mobiles to customers The next three years will see a tectonic shift in the manner in which distribution and broadcast of electronic video content is accessed by customers. The next three years will see a tectonic shift in the manner in which distribution and broadcast of electronic video content is accessed by customers.

8 Explosive Growth of Media need for convergent regulation Current regulations ensure non- discriminatory access to all technology platforms for video content. Current regulations ensure non- discriminatory access to all technology platforms for video content. Two recent bold decisions of TRAI to allow a la carte choice of TV channels to network service providers in DTH/analogue non CAS areas has ensured a balanced level playing field. Two recent bold decisions of TRAI to allow a la carte choice of TV channels to network service providers in DTH/analogue non CAS areas has ensured a balanced level playing field. The tight price controls are intended to empower customers to pick and choose premium content without compulsion of hard bundling by broadcasters. The tight price controls are intended to empower customers to pick and choose premium content without compulsion of hard bundling by broadcasters.

9 Explosive Growth of Media need for convergent regulation With improved digital compression, the present regime of a 100 TV channels is going to get replaced by a million customized choices especially through IPTV With improved digital compression, the present regime of a 100 TV channels is going to get replaced by a million customized choices especially through IPTV Broadcasting in its generic shape will convert to narrowcasting of localized interactive content and finally niche-casting of consumer selected programmes Broadcasting in its generic shape will convert to narrowcasting of localized interactive content and finally niche-casting of consumer selected programmes Live-casts of sports and news will continue. The rest of content will shift to the time and choice individual to each customer. This throws many regulatory challenges which need to be seen holistically. Live-casts of sports and news will continue. The rest of content will shift to the time and choice individual to each customer. This throws many regulatory challenges which need to be seen holistically.

10 Explosive Growth of Media need for convergent regulation The International Telecommunication Union defines convergence as technological,market or legal/regulatory capability to integrate across previously separated technologies The International Telecommunication Union defines convergence as technological,market or legal/regulatory capability to integrate across previously separated technologies This implies the creation of a single regulatory authority which will regulate convergence be it digital broadcast through Cable/DTH/IPTV/mobile TV or live streaming or video on demand or VOIP. This implies the creation of a single regulatory authority which will regulate convergence be it digital broadcast through Cable/DTH/IPTV/mobile TV or live streaming or video on demand or VOIP.

11 Explosive Growth of Media need for convergent regulation The International Telecommunication Union defines convergence as technological,market or legal/regulatory capability to integrate across previously separated technologies The International Telecommunication Union defines convergence as technological,market or legal/regulatory capability to integrate across previously separated technologies This implies the creation of a single regulatory authority which will regulate convergence be it digital broadcast through Cable/DTH/IPTV/mobile TV or live streaming or video on demand or VOIP. This implies the creation of a single regulatory authority which will regulate convergence be it digital broadcast through Cable/DTH/IPTV/mobile TV or live streaming or video on demand or VOIP.

12 Explosive Growth of Media need for convergent regulation The World Bank observes that convergence allows new entrants to enter into protected markets. Telecom companies are providing IPTV and cable companies will provide telephony The World Bank observes that convergence allows new entrants to enter into protected markets. Telecom companies are providing IPTV and cable companies will provide telephony Convergence ‘opens up possibility of greater competition that will benefit consumers with aggressive pricing,increased availability and competitive service packages.’ Convergence ‘opens up possibility of greater competition that will benefit consumers with aggressive pricing,increased availability and competitive service packages.’ ‘The challenge is to offer both service providers and users flexibility to deploy and enjoy new technologies.’ ‘The challenge is to offer both service providers and users flexibility to deploy and enjoy new technologies.’

13 Explosive Growth of Media need for convergent regulation Very few countries have a converged regulator. Some examples are Malaysia,UK and USA Very few countries have a converged regulator. Some examples are Malaysia,UK and USA India had planned a converged regulator in 2001 with technology neutral licensing and an Appellate Tribunal India had planned a converged regulator in 2001 with technology neutral licensing and an Appellate Tribunal The Bill was a revolutionary effort to regulate all converged media/telecom even though it fell short of the Supreme Court directive of 1995 in terms of setting up an independent autonomous authority. The Bill was a revolutionary effort to regulate all converged media/telecom even though it fell short of the Supreme Court directive of 1995 in terms of setting up an independent autonomous authority.

14 Explosive Growth of Media need for convergent regulation Today we do have a Universal Access Service Licence for 22 circles costing 1680 crores but many issues relating to content control and level playing field between telecom and cable need urgent settlement Today we do have a Universal Access Service Licence for 22 circles costing 1680 crores but many issues relating to content control and level playing field between telecom and cable need urgent settlement TRAI has recently launched a series of consultations on IPTV/HITS/Mobile TV TRAI has recently launched a series of consultations on IPTV/HITS/Mobile TV The UASL license deserves a complete overhaul as technology is always outstripping any licensing regime The UASL license deserves a complete overhaul as technology is always outstripping any licensing regime The time has come to revive a Convergence Authority/Tribunal. The time has come to revive a Convergence Authority/Tribunal.

15 Explosive Growth of Media need for convergent regulation The challenge for the immediate near future is to create a level playing regulatory environment with clear cut ‘light’ facilitative but transparent technology neutral consumer friendly regulation The challenge for the immediate near future is to create a level playing regulatory environment with clear cut ‘light’ facilitative but transparent technology neutral consumer friendly regulation This will enable both existing incumbents and new entrants to compete equitably to provide all forms of content/services that appeals to individual customers rather than mass bundled content to customers at attractive rates. This will enable both existing incumbents and new entrants to compete equitably to provide all forms of content/services that appeals to individual customers rather than mass bundled content to customers at attractive rates.

16 Explosive Growth of Media need for convergent regulation In conclusion Indian media is on the cusp of tectonic changes in the way customers will access video and gaming content In conclusion Indian media is on the cusp of tectonic changes in the way customers will access video and gaming content The current growth estimates show that this sector will easily double the annual GDP National growth figures The current growth estimates show that this sector will easily double the annual GDP National growth figures The challenge lies in creating a legal and regulatory framework enabling creation of a viable business model while maximizing consumer choice serving various demographic and economic price points. The challenge lies in creating a legal and regulatory framework enabling creation of a viable business model while maximizing consumer choice serving various demographic and economic price points.

17 Explosive Growth of Media Thank You Ashok Mansukhani President – Corporate Affairs President