Telenext intends to capture the market through MSOs. MSOs get benefited more than the Telenext SDP end users because of the stable revenue from the backend services. Furthermore, MSOs are benefited by:

• Cable operators get the opportunity to become MSOs
• Homegrown Scrambling solution - very much cost effective

Most of the consumer electronics companies, as well as the leading world players will enter the fray of offering Set Top Boxes. Also there would be confusion between choosing the analog and digital product offering. Despite inherent advantages digital STBs would force the MSO to migrate to a fully digital or a hybrid platform. And this migration is fairly expensive, and technologically demanding. There would be significant expenses the; MSOs would have to bear. There are around 7 international players, and three to four domestic players vying for the market. The global players like Scientific Atlanta, Motorola, Eastern Electronics, MDI, Thomson multimedia, Dalvi, Pace Electronics have expressed their interest in Indian market. In the conditional access, NDS, Nagravision, Canal plus etc are already in the Indian market.

Telenext Convergence will develop fully home-grown scrambling and security solution, which would be highly advanced and competitive compared to the imported solutions, and would provide substantial foreign exchange savings, close to Rs.200 crores in the metro phase of deployment, along with considerable saving in subsequent annual charges.

For the customer, the company will design, develop and deploy digital set-top boxes, capable of doubling up as a powerful thin client, VOIP machine, MPEG 4 player, up gradable to Personal Digital Video Recorder The price advantage of analog STBs would be an initial attraction, but in the long run, they would limit the, potential of MSO, as well as end-user to upgrade to new services. The conditional access platform, if imported, would be a very expensive proposition to the MSOs. At the head end level Telenext would offer the following product offerings

• Telenext CA, SMS, digital pay channels and Backend suite
• TELENEXT CA, SMS, hybrid pay channel offering, backend suite

With this product differentiation, Telenext would be able to offer products within Rs. 3700 to 5,500 brackets depending on the quantity. (Min.1, 00,000 Nos)

Unique Selling advantage
Telenext Convergence has the support from many of the small head-end operators, and this absolve the risk of the primary investor, since the initial cost of design and development can be amortized to the initial captive business.

Regulations and Licensing
The Government of India has mandated the deployment of conditional access systems for pay channel delivery. The implementation deadline begins from July 14th in four major metros. The deployment in rest of the country is to be carried out in phased manner. The bureau of Indian standards (BIS) has finalized the specifications for the analogue and digital CAS set top boxes, the details of which are given in appendix.

The production of the STBs, and deployment of the solutions need to be confirmed to the BIS standards, and the Box requires a BIS marking for sale in the market.

The Production does not require any licenses. Only the cable/channel delivery comes under the licensing.