NEW DELHI: The government has decided to double the customs duty on imported set-top boxes (STBs) to ten per cent, a move set to encourage domestic manufacturers but to have immediate consequences on prices and possibly hurt multi-system operators (MSOs) and DTH companies.

The government feels that domestic production of STBs would get a stimulus even as implementation of digitisation spreads across the country.

Finance Minister P Chidambaram said in his Budget speech for 2013-14 that the aim was also at value addition in the sector.

With the first phase of digitisation having commenced in the metros (barring Chennai where it is held up by a court case) on 1 November last year and the second phase of switch-off of analogue signals scheduled for 31 March, the country is facing acute shortage of standardised STBs and has to depend on imported boxes.

The Information and Broadcasting Ministry had last month urged the Finance Ministry to remove the anomaly between imported and indigenous STBs.

Countdown had commenced in late November for the second phase covering 38 cities in 15 states.

The Ministry had issued a notification on 11 November 2011 notifying Phase-wise digitisation of Analogue Cable Television Networks in India.

The aim is to digitize the cable sector in the country by 31 December 2014. The target date for completely digitising cable sector in cities with population of more than one million is 30 March 2013, all urban areas by 30 September 2014, and the whole country by 31 December 2014.

For the second phase, the 38 specific cities and areas which have been listed in the notification are - Bangalore, Hyderabad, Ahmedabad, Pune, Surat, Kanpur, Jaipur, Lucknow, Nagpur, Patna, Indore, Bhopal, Thane, Ludhiana, Agra, Pimpri-Chinchwad, Nashik, Vadodara, Faridabad, Ghaziabad, Rajkot, Meerut, Kalyan-Dombivali, Varanasi, amrtisar, Navi Mumbai, Aurangabad, Solapur, Allahabad, Jabalpur, Srinagar, Visakhapatnam, Ranchi, Howrah, Chandigarh, Coimbatore, Mysore and Jodhpur.