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DAS: What is happening at the grassroots?

DAS: What is happening at the grassroots?

Author | Abhinav Trivedi | Friday, Feb 07,2014 9:46 AM

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DAS: What is happening at the grassroots?

As the TRAI deadline for filling Consumer Application Forms (CAF) expired in certain cities, reports of MSOs switching signals in Bangalore have emerged. TRAI had asked MSOs to shut down the signals of the LCOs which do not submit their Consumer Application Forms within the stipulated deadline.

MSOs across the country have been vocal about the fact that they are on the verge of completion of their Consumer Application Forms. “We have received 95 per cent of our Consumer Application Forms. The remaining 5 per cent needs to be tapped and we would tap them by February 7, the deadline for Phase II cities,” said an official from GTPL Hathway.

A highly placed official in DEN Networks has also confirmed the fact. “We are committed to transparency and the TRAI deadline. We have completed almost all of our CAF formalities and we are sure of achieving 100 per cent completion within the stipulated time,” said a highly placed official at DEN Networks.

Is the grassroot situation similar?
On conversing with few LCOs over the grassroot situation in the metros and few other cities which were covered in Phase I of digitization, different viewpoints are emerging. Following issues still exist at the grassroot level and at the peril of the last mile operator and, therefore, bother the stakeholders:

Speculation over authenticity of CAFs
LCOs on condition of anonymity in various markets have shared that in many cases CAFs are not actually filled by the consumers themselves. “MSOs have to comply with the TRAI deadline. On paper, everybody wishes to show that they have completed the form filling. But that is not true,” said an LCO in Delhi.

Another LCO in East Delhi mentioned, “After Phase I, consumers have registered set top boxes. Therefore, the names and addresses are there with the MSOs, but consumer choices and package, where the revenue sharing part comes in, is usually a mess. Using this information (of names and address) which we give to MSOs, they compile their own set of CAF and submit it. They do not get it duly filed by the consumers. MSOs are in a hurry.”

MSOs though have denied this argument completely. A spokesperson from Incable, a leading MSO in Delhi and Mumbai, mentioned, “I don’t agree with these allegations. We have a robust market in Delhi and CAFs need not be submitted physically only. This is not the old era, where CAFs need to be physically submitted. Maybe LCOs are not aware of that.”

Thus, there is still a rift when it comes to authenticity of the forms. Analysts agree that MSOs in Phase I cities are in a hurry and are pushing the LCOs for completing the forms. However, in markets such as Indore and Bhopal, where the deadline for CAF is February 7, there is still a huge gap that needs to be tapped. Observers state that speculations are inevitable when the time is less and the targets are high.

Revenue sharing tussle
When it comes to finance, MSOs and LCOs are still at loggerheads. Due to pressure from the broadcasters and content aggregators and TRAI, LCOs are compelled to share more revenue than they used to earlier. “If I should be getting Rs 385 monthly as an ARPU, I am still getting Rs 220-Rs 250 from the LCO. They are not willing to share and, most importantly, declare,” said an official from Star Broadband Services, an MSO in Delhi. MSOs also said that the consumer is not ready to pay extra money and, therefore, ARPUs still remain the same and not everything can be blamed on LCOs.

However in markets such as Indore, LCOs have not been responding favourably. A leading MSO said, “The market of Indore is tough and CAFs need to be still filled out. LCOs do not share the exact number of subscribers and it is unlikely that there will be a completion before the deadline. We will shut down the signals of the set top boxes that do not comply.”

Oversupply of set top boxes
Another problem, although not rampant but is a concern for MSOs and LCOs, is the oversupply of set top boxes in certain markets. These set top boxes are not accounted for and hence, create a hurdle when it comes to accountability. Some LCOs take multiple set top boxes from multiple MSOs, which create confusion at the time of billing. However, stakeholders in the industry say that post digitisation, the problem has been taken care of and the number of such developments has reduced considerably with time. However, some feel that the issue still exists and needs to be addressed.

Placement of packages
“In certain cities, LCOs place the channel packaging in a certain house of a society after a consensus with the society members and, therefore, exact declaration of every household is not happening. Package is, therefore, allocated on location and not on a specific demand,” said a leading MSO operating from Bangalore. He further added, “The last mile declaration is the biggest problem and that will take time to resolve. A consumer has been paying fixed fee without any accountancy of channels being watched.”

Other MSOs that we spoke to have said that a possible solution to address the last mile problem could be to convert pre-paid payments to post-paid for the actual usage, but that is unlikely to happen in the near future.

 

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