Monthly cable TV rates across the country are set to go up by 6-7% from January 2005. Increase in cable tariff has been calculated keeping in mind prevailing inflation rates. The Telecom Regulatory Authority of India (Trai) is likely to issue an order on revised cable TV rates in a couple of days, according to sources close to the development.
Last December, Trai had issued an order freezing cable TV rates for all areas where conditional access system (CAS) was not applicable. Currently, Chennai is the only city with CAS. Although government had mandated CAS for all metros, only Chennai was able to roll it out. CAS refers to a system where TV viewers can access channels of their choice through set-top boxes and pay only for these. But the issue had turned controversial ahead of elections, leading to CAS rollback.
Cable rates were frozen on December 26, 2003. The freeze applied to charges payable by consumers to cable operators, by cable operators to multi-system operators (MSOs), and by MSOs to broadcasters.
However, the government had increased the service tax on cable companies from 8 to 10% recently. “Trai has no control on government taxes,” a Trai official had commented. The cable firms were not able to pass on the increase in taxes to consumers (TV viewers) due to Trai’s tariff freeze order.
Cable operators have been nursing the grudge that, even as more and more channels are turning pay and operational cost of running cable networks is going up, they are barred from increasing the monthly subscription rates.
The scenario is a little different in the case of broadcasters. That is, Trai had frozen pay channel rates, but had allowed broadcasters to negotiate with cable operators for higher subscriber declarations.
There are around 48 million cable TV viewers in the country. The cable industry is understood to be employing around 15 lakh people.
In a recent memorandum to Trai, a cable association, Cable Operators Federation of India, had said: “...the additional burden is being borne by the operators and government remains totally silent. Trai must withdraw this rate freeze now since increase in taxes and pay channel rates etc must be passed on to subscribers in the form of higher subscription rates.”