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Cable operators find it difficult to cope up with Star TV’s rate hike

12-November-2001
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Cable operators find it difficult to cope up with Star TV’s rate hike

Cable operators have been caught off guard by the decision taken by Star to hike its subscription rates from January 2001. They feel it would be an uphill task to make the average consumer shell out additional money for watching the same number of channels.

Meanwhile, the industry buzz is that ESPN-Star Sports too is planning to increase its subscription rates by around Rs 8-10 from January.

The cable industry reacted sharply to the news of Star’s impending rate hike. According to them there will be major resistance from the cable operators.

According to industry sources cable rates have been rising steeply over the last six months with more and more channels going pay. Leave alone cable operators, even the end users will too resist the hike.

According to analysts the cable companies (MSOs) may too have to bear the brunt. While there is a strong buzz about ESPN-Star going in for a rate hike in January, FTV too is going pay from December 1.

But a solace for Star would be that major cable companies are quite certain that despite the hike, there wouldn’t be any blackouts of Star channels, at least in the Capital.

A latent fear in the cable operators’ mind is that Zee and Sony may watch the impact of Star’s price hike closely and at some point decide to go for their own hikes instead, if Star manages to pull off its rate increase without any hitch.

According to a senior cable industry official, Star’s rate hike may also have been prompted by the fact that the channel was now riding a wave of high TRPs for its programmes, while its rival channels were not well-represented at all in the top 50 programmes on TV.

While media reports have indicated that Star will hike its subscription rates from Rs 30 to Rs 42 per connection from January 2002, taking cable subscription rate across the country up by at least Rs 25 to Rs 40 per cable home.

On the flip side the cable operators do admit that Star’s decision to go in for a rate hike in the face of persistent under-declaration of subscriber numbers by the cable operators may have the effect of disciplining the cable industry per se.

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