The Hindu Business Line : Duty cut on STB's: Advantage customers, but doubts persist

THE Finance Ministry's notification on a temporary reduction in basic customs duty on set-top boxes (STB) to five per cent from around 50 per cent has been met with guarded enthusiasm among multi-system operators (MSOs) and broadcasters here.

While MSOs are still working out the implications on costing, they agree that the duty cut would make STBs more affordable, and that deployment would increase. The duty reduction is expected to reduce the prices of STBs by about Rs 1,500-Rs 2,000 across the board.

"It's extremely welcome — it will push up deployment and make it much easier to offer customer-friendly schemes," said Mr Ashok Mansukhani, Executive Vice-President, Hinduja TMT Ltd, which owns INCableNet.

The city's largest MSO had previously priced its digital STBs at Rs 4,500 and placed an indent for a "significant number of STBs". It would now do a survey to estimate additional demand, and announce its new pricing, he added.

Hathway Cable & Datacom intends to pass on "the entire benefit to the customer", said Mr Neeraj Bhatia, Vice-President, which has contracted with NDS for CAS deployment. A spokesperson for Star India commented that the duty cut would certainly benefit the customer.

However, some industry experts are of the opinion that the move would only add to the confusion, and that it will not even have a major impact on penetration. "Penetration could move from microscopic to miniscule — as for pricing, the MSOs are importing the STBs, and will add a margin to cover their cost of setting up the system," said one expert.

"There is no Government stipulation on the cost of the STB, and most MSOs have not announced their pricing yet. So unless they slash the pricing by the same percentage, I remain sceptical."

Further, the reduction in duty is only applicable from May 28 to July 31; the Government will revert to the earlier duty structure from August 1. "It is too little, too late," the expert said.

Article E-Mail :: Comment :: Syndication

Stories in this Section
Pension scheme not for pvt insurance cos

VSNL net down 44 pc on lower tariffs

Iranian co agrees to sell stake — Decks cleared for MFL sell-off

Better product-mix takes Tata Steel net up 394 pc

Duty on set-top boxes cut to 5 pc

Duty cut on STB's: Advantage customers, but doubts persist

India may open talks with Iraq to collect old dues