Sky, Home Cable to set up digital boxes by Oct

Central CATV, the common operator of dominant cable firms of Sky Cable and Home Cable, will introduce digital addressable set-top boxes starting October this year among its cable television subscribers, a move being resorted to in order to put a stop to signal piracy.

Highly-placed company officials told The STAR that they are now in talks with the foreign suppliers of these boxes which would not only eliminate illegal cable TV connections but also allow the company to introduce new services such as video-on-demand and pay per view.

One official revealed that the installation of set-top boxes among all its subscribers will probably be a three-year process, depending on the availability of funds. Starting initially in Pasig, the boxes will then be installed in the Makati area later this year.

Each box will cost Central CATV around $50 (roughly P2,800) which means that installing the boxes in all 200,000 homes of its subscribers will entail an investment of as much as P560 million, assuming a ratio of one television per home. But since each home has more than one TV set, the investment required could easily double, if not triple.

The acquisition of the boxes will be financed largely from the proceeds of a loan extended by ABS-CBN Broadcasting to its sister company Central CATV. Earlier, ABS-CBN extended a $30-million (around P1.5 billion) loan to Central CATV, of which less than P1 billion remains after loan interest payments and operational expenses of roughly P500 million.

The $30-million infusion of additional funds into Central CATV was a condition precedent to the signing of a debt restructuring agreement with creditor-banks for combined Sky-Home loans totaling P2.5 billion.

It is, however, not known how much of the remaining P1 billion will be spent for acquisition of set-topboxes. But the Lopez group is reportedly ready to invest additional funds to finance the acquisition of these boxes.

Under the new setup, the channels will be encrypted in the boxes and without the boxes, the subscriber will be receiving no signal.

Company officials earlier told The STAR that plans are to give one box per home for free while the additional boxes for the other televisions hooked on cable will have to be acquired by the subscriber.

There are also plans by Sky and Home to introduce prepaid cable TV subscription for P300 a month. For this amount, the subscriber will get the free channels (Channels 2, 4, 5, 7, 9, 13, 23) as well as five or six additional cable channels (news, movie, sports, among others).

Sky and Home officials estimate that there are easily 100,000 homes in addition to the existing 200,000 subscribers that will patronize the prepaid subscription. This prepaid offering will however require addressable set-top boxes and it is not yet clear whether the prepaid subscribers will likewise be getting their boxes for free.

With the boxes, Sky and Home will also be able to offer pay per view channels for its subscribers, with the revenue to be generated expected to offset the cost of the boxes.

Putting a stop to signal piracy is also expected to drastically increase the subscriber base. It is estimated that in addition to the total of one to 1.5 million paying cable TV subscribers nationwide, another 750,000 to one million are hooked illegally.

Both the Sky and Home Cable brands are now owned by Lopez-controlled Central CATV after the PLDT group sold the Home Cable assets in exchange for Central CATV shares. As a result, Central CATV is now owned 66.66 percent by the Lopez group and 33.33 percent by the PLDT group.