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Star, INCablenet headed for another showdown over fees

09-July-2002
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Star, INCablenet headed for another showdown over fees

Star India and the Hindujas-promoted InCablenet appear to be headed for yet another showdown over fees payable by the later to the broadcaster. With the contract with Star for distribution of its pay channels ending on June 30, InCablenet sought an extension to the contract.

The crux of the issue is the number of subscribers, which Star is getting paid for by InCablenet and the estimates of the subscriber base according to Star.

According to Star’s estimate the subscriber base of InCablenet in Mumbai would be around 1.5 million, while they get paid for just around 10-11 per cent of this figure. Therefore, it is asking InCablenet to make a higher declaration or effectively increase the subscriber base which is paid for.

The terms for extension of the contract by Star though were unacceptable to InCablenet, which took the battle to the press with an ad warning its cable consumers to be prepared for a 300 per cent hike in cable subscription in case Star India's terms were to be met. InCablenet also warned its consumers, distributors and franchisees that there could be "a break in signal due to Star switching off their signals".

According to industry experts the allegations of under declaration by the broadcasters against multi-system operators (MSOs) would be a perpetual one until an independent regulatory agency is in place which can audit the subscriber base.

On their part, the MSOs say that the issue can be resolved with the introduction of the conditional access system, which the Union government has approved since in that case viewers would have to pay for only those channels which they choose to view as against the forced acceptance of bundled channels at present.

The Star bouquet comprising 8 channels (Star Plus, Star Movies, Star World, Channel V, Star Gold, Star News and National Geographic) is currently priced at Rs 40.50 per subscriber.

The company had hiked its rates from Rs 30 to the current rate for its bouquet from January 1, 2002.

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