In a unique high-tech venture, a Singaporean technology firm has won a multi-million dollar deal to upgrade 400 Indian cinema halls with digital projectors by April 2004.

The first movie theatre, in Mumbai, will start operating under the new format - the first in India - by the end of this month, the Business Times newspaper published from Singapore reported on Tuesday.

For doing this, Singapore-based GDC technology has set up a joint vnture with Adlabs Films, India's largest motion picture processing lab, to retrofit the cinema halls by digital film servers and digital projectors.

"Our target is to retrofit 1,500 e-cinemas in India by 2007," GDC Technology's marketing head Benjamin Ng was quoted as saying.

The company will also convert Indian-made feature films into a digital format that will save thousands of dollars per movie in distribution costs, it said.

"The feature film itself will be stored in a high-capacity disk drive double the size of a cigarette packet," Ng said adding, "This will be couriered to the cinema. Once the movie's run has ended, another digital pack will be couriered and the old made obsolete. The entire movie will be digitally encrypted, so it will be impossible for pirates to copy it."

"E-cinema is the way to go in India because the movie industry in India itself is unique. We are planning to offer through various distributors one digital movie a week," managing director of Adlabs, Manmohan Shetty, was quoted as saying.

"A 35 mm movie reprint would cost more than $1000. Our technology would cut that cost to a fraction of the amount, especially in the long run," Ng was quoted as saying.

He, however, did not say how much it would cost to retrofit a cinema hall. Industry sources said it may range from $80,000 to more than $125,000 depending upon the size of the hall, acoustics and other factors.

If it averages $100,000, the retrofitting exercise for 400 theatres alone would mean gross revenues of $40 million.

The digital release or print can be produced almost without human intervention within 24 hours. It costs about $50,000 to digitise a full-feature movie.

India has about 10,000 cinema theatres and is the world's most prolific producer of feature films at 1,000 a year.

However, very few prints are made in the first week of the movie's release, the paper said, adding this encourages piracy. The digital distribution method will solve the distribution and piracy probem, it said.

Privately-held GDC group now employs about 300 people. It has production facilities in China, R & D in Hong Kong marketing in Singapore and has an office in Hollywood.