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TRAI releases draft Recommendations on restructuring the cable TV sector

16-July-2008
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TRAI releases draft Recommendations on restructuring the cable TV sector

TRAI has recommended a separate licensing framework for local cable operators and multisystem operators in its draft recommendations to restructure cable television services. The Indian cable TV sector has grown rapidly in the past two decades largely due to entrepreneurial skills of the cable TV operators.

Cable TV homes in India have risen to 78 million at the end of 2007. Although the physical spread of cable TV sector has been significant, the sector in its present form is experiencing challenges of technological upgradation, appropriate addressability and resources. The regulatory framework needs to address the issues of transparency, addressability, vertical restructuring, fragmented distribution chain, low digitalisation of TV networks and technological upgradation.

In order to address the above issues, TRAI had suo motu initiated a consultation process by floating a detailed consultation paper on ‘Restructuring of Cable TV Services’. Based on the views of the stakeholders, international experience and in-depth internal study these draft recommendations have been evolved. The Authority has kept in view that most of the existing cable TV operators are not having huge funds and have already invested considerably in their cable TV network.

The proposed regulatory framework has facilitated migration of existing cable TV operators and all forms of entry barriers have been discouraged. Emphasis has been laid on long term stable, organised, and supportive licensing framework to encourage innovation and investments in the sector.

There was also fierce competition to existing conventional cable TV operators from those who use advance distribution technologies like DTH (direct-to-home), HITS (Head end in the sky) and IPTV (Internet Protocol TV), TRAI added. DishTV India Ltd and Tata Sky compete in India’s DTH market, with mobile phone operators Bharti Airtel Ltd and Reliance Communications Ltd also planning their entry over the next few months.

TRAI, which says absence of licensing and regulation frame work could slow future development, also encourages voluntary CAS (conditional access system), which allows viewers to select pay channels.

The silent features of the Draft Recommendations are the licensing framework in lieu of present registration system, separate licensing framework for local cable TV operators (LCOs) and multi system operators (MSOs), rationalisation of eligibility criterion, rationalisation of choice for service area both for LCOs and MSOs and easy migration arrangement to proposed licensing regime for existing registered cable TV operators.

The MSO’s' main function is to aggregate content from different broadcasters and to provide it to the LCOs. Therefore, the regulatory framework for the MSOs should be different from LCOs. The entry fee for district level MSO licence shall be Rs 1 lakh and net worth Rs 5 lakh. The entry fee for state level MSO licence has been proposed at Rs 10 lakh and net worth at Rs 10 lakh.

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