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Industry welcomes TRAI’s call to revamp cable TV services, says move will attract more investment

Industry welcomes TRAI’s call to revamp cable TV services, says move will attract more investment

Author | Pallavi Goorha and Puneet Bedi Bahri | Monday, Jul 21,2008 8:53 AM

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Industry welcomes TRAI’s call to revamp cable TV services, says move will attract more investment

Cable TV operations in India are in for a major revamp, with TRAI recommending separate licensing framework for local cable operators and multi-system operators in its draft recommendations on restructuring cable television services in its paper released on July 16, 2008. exchange4media speaks with COFI and TRAI officials, TV channels and DTH operators on the implications of these recommendations.

Welcoming TRAI’s draft recommendations, the Cable Operators Federation of India (COFI) said that if made into a policy, it would bring growth to the cable industry without increasing charges for viewers. “We are happy with the recommendations made by TRAI, which would help regularise the industry. The introduction of PAN Card and other ID proof to get a license would enable the operators to get loans from financial institutions easily. It would in turn help cable operators offer better technology and quality of service to customers," said COFI President Roop Sharma.

According to the draft proposals, the operators can also provide new services like IPTV by utilising their existing transmission infrastructure, customer resource management (CRM) and invoicing systems. These developments would help local cable TV providers to have options to provide various value added services, Sharma added.

She further said, “The proposed move to impose entry fee would not result in any increase in cable rates as the fee is very reasonable, that is, Rs 10,000 for a five-year license period, which is not much in inflationary times like these, which comes to just Rs 2,000 per year. The tariff for Pay TV should be fixed, otherwise channels could keep increasing it. LCOs should be allowed to run local video channels, where local advertisers could advertise important messages from the police, the municipal department, etc.”

TRAI has recommended an entry fee of Rs 10,000-Rs 100,000 for a five-year license period for cable operators, depending on the service area. Multi-system operators, for whom TRAI has also proposed licenses, said that they had not gone through the fine print of the regulator’s recommendations to comment as the report was bulky.

According to industry estimates, there are 70,000 cable TV operators in the country. The current market size of the TV industry is estimated at around Rs 23,000 crore. TRAI Chairman Nripendra Misra said, “Regulating the MSOs separately would be one of the most significant changes. It will make the sector attractive for investments and growth.”

The regulator believes that MSOs have a distinct functional responsibility, and a separate licensing regime would help them have well-defined technical and commercial arrangements with broadcasters and local cable operators.

Industry experts felt that with proper licensing, the industry would be able to tap finance from institutions and banks, which have been wary about offering loans to unregulated operators. This is important for cable operators that need to switch from the analog to digital format in the face of the growing challenge from direct-to-home and set-top box-based cable TV.

A Mohan, Secretary, MSO Alliance, said, “We welcome this move because it will also lead to faster digitalisation of the cable industry.”

Commenting on the implication made by TRAI, Rahul Sood, Head of Network Distribution & Affiliate Sales, NDTV, said, “It was long overdue and I am glad that TRAI has finally done so. In light of all the changes happening in the TV distribution environment, a shorter time frame (say 2-3 years) should be mandated for digitisation to be completed, as against five years.”

Sood further said, “DTH or cable operators both will co-exist together with newer platforms like IPTV, mobile TV, etc. With cable controlling approximately 90 per cent of the market and digitisation being the mantra for all MSOs / key networks, it will be survival of the fittest to grab and hold on to subscribers.”

Commenting on whether TRAI should fix the charges of the channels in a bouquet, Sood said, “With price guidelines in place, it already is happening to a certain extent. Since we are operating in a free market environment, wherein the subscribers have multiple choices, market dynamics should determine a fair price for channels.”

Barun Das, CEO, Zee News Ltd, said, “The cable TV industry needs to be organised at the earliest. Today, this unorganised sector is one of the biggest impediments for the growth of the Indian television industry. Last mile traceability, which is one of the biggest issues for all paid channels, will get addressed significantly when the broadcasters will get to deal with an organised sector.”

Regarding existence going forward, he said, “Both will co-exist, however, last mile traceability and interactivity / reverse channel will always be an advantage for DTH.”

Also read:

TRAI releases draft Recommendations on restructuring the cable TV sector

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