Cable operators would need to make huge investments in infrastructure as the government is likely to permit them to offer last mile linkage for basic telephony and make them eligible to become a fixed service provider by obtaining a licence while providing the usual services such as media, entertainment and internet.

In view of convergence, it is also highly likely that two-way communication (including voice, data, and information services) through cable network would emerge in a significant way in future.

In case, the cable companies have to bid for such services they will have to make substantial investment in laying the infrastructure such as fibre optics. The biggest question in that case would whether the Indian cable operators are in a position to offer such services.

The discussion paper may also enthuse private and foreign players incable sector in the country. The cable law already contains provision for allowing 49 per cent foreign equity in cable companies. In case the government finally decides to formulate its telecom policy in the same lines, it is expected that new players both foreign and domestic are expected to enter the sector.

Cable Networks Association president Rakesh Datta said the recommendations were welcome and would lead to cable operators entering into alliances to become big corporate entities. If the Cable Networks Act makes it mandatory to have one or two cable operators in one telecom circle, it would benefit the industry vis-a-vis the current fragmented status of the industry, according to Datta.

The corporate entities which would be created after mergers would be able to mobilise funds from the market for investment in infrastructure, he said.

Datta however, cautioned that the government should take necessary precautions for protecting the smaller cable operators in the face the onslaught of the biggerplayers such as Siti Cable, InCable Net and RPG group. He said that in case such a protection is not provided, vertical monopolies are possible.

The country already has the presence of big international players such as UIH though its current operation in the country is small. Apart from Siti and InCable Net other players including the UB-group is also believed to be eyeing the segment. RPG-group is already the dominant player in Calcutta.

The bigger players seem to be in a better position to invest in infrastructure for the new bunch of services but as far as the reach is concerned smaller players are one up.

Union information and broadcasting ministry is currently working on the Cable Networks Act. Given the new avenues that are being opened up for the cable operators some changes are expected to be introduced in the law. Though the cable operators are somewhat pensive about the fallout of the opening up of direct-to-home television service yet, the new opportunities is likely to help them to retaintheir importance.