MUMBAI: Multi system operator (MSO) DEN Networks has commenced the non-commercial field trial of its 4K Android-based Hybrid set top boxes (STBs). The hybrid STB, which will support both cable TV and Internet-based TV, is expected to launch in February.

“We have started a non-commercial field trial of our new product 4K Android Based Hybrid STB, which will support both cable TV and Internet-based TV,” DEN Networks CEO SN Sharma said in an interaction with analysts.

Sharma further stated that the hybrid STB has received feedback from the subscribers are good. As part of the trial, the STBs have been seeded boxes across the country.

“We have seeded boxes across the country to gauge the experience and see if there are any finer points to be uploaded in the software and very soon by the middle of February or so we will be formally announcing the price and that will be formal go ahead of the box,” he added.

Direct to home (DTH) operators Tata Sky and Videocon d2h had launched 4K STBs. Airtel Digital TV has launched a hybrid STB which allows subscribers to access online content on TV screens.

The MSO is also negotiating content deals with big two of India broadcasting Star India and ZEEL. It had renewed deals with Sony Pictures Networks India and IndiaCast in 2017 for a period of two years.

“As of now the two deals are under renewal that is through major broadcasters Star and Zee, Sony and Colors got concluded for about two years the last year itself. Star and Zee now are under negotiation effective January 1, 2018,” he stated.

Sharma said that the MSO is determined to contain the content cost growth within 10% as the subscription fee collection from the ground is improving steadily.

“That is what we could do even in last year though the deals were for longer period and there were some nominal extra effects due to last to last year’s lower growth given to them. Going forward also we are well determined and negotiating accordingly. There is no point in paying them more than what we earn from the ground,” he added.

DEN, which has 13 million cable homes and 8.4 million active subscribers, is working on a long term strategy to grow the broadband business. The business plan will be announced in the exit quarter of FY18. DEN has net subscriber base of 2.15 lakh of which approximately 60% are active subscribers.

After rolling out broadband in select 10 cities across 4 states, the MSO plans to expand broadband offering in 10 more cities.

The company spent Rs 118 crore in Capex in first nine months of FY18. Most of the Capex went into broadband as the cable TV business doesn’t require much Capex.

“I think we had about Rs. 118 Crores of capex for the first nine months and as Sharma had explained that I think most of the capex deployment in the future is going to be in broadband business and very little in the cable side because of the fact that most of the deployment of the boxes are already done and there is very little subsidy on the box,” DEN Networks CFO Rajesh Kaushal said.

DEN is using a mix of Docsis and Gpon for providing broadband service. The use of Gpon technology has helped the company to reduce the acquisition cost to Rs 300-350 per customer from Rs 900-1000.

“As of now you can say it is a hybrid technology suiting the requirements of the customers because no point in going in for providing in top of the world technology whereas paying capacity or the returns that you are likely to get are at a very low level and we were able to give him a good experience and we are able to give him the service level that we wants that is enough for us. So we are working with Metro Ethernet also and GEPON also,” Sharma expounded.

DEN has spent Rs 11 crore for expanding broadband in 10 cities. The Capex for covering the next 10 cities will be in the region of Rs 10 crore. The total Capex for covering 20 towns will be around Rs. 20 crore.

The MSO is also put a lot of focus on seeding high definition (HD) STBs. Most of the STB deployment is happening on the HD side.

“Most of our deployment is happening on the HD side of the boxes, which are getting deployed and there is a slight churn I think, but that is only a temporary phenomenon,” Kaushal said.