TRAI Regulation: LCOs in South India allege conspiracy, to go on strike on January 24

The associations of Local Cable Operators in South India are demanding change in tariff orders, reduction of GST from 18% to 5%

by Neethu Mohan
Published - Jan 21, 2019 8:59 AM Updated: Jan 21, 2019 8:59 AM
TV

The new tariff regulations by The Telecom Regulatory Authority of India (TRAI) will come into effect from February 1.  In the wake of this, the associations of Local Cable Operators in south Indian states including Kerala, Tamil Nadu, Karnataka, Andhra Pradesh, and Telangana have announced that they will be going on strike on January 24. The strike will result in the black out of TV screens in all these five states.

The operators demand change in tariff orders, reduction of GST from 18 per cent to 5 per cent.

Speaking to exchange4media Patrick Raju, President, Karnataka Cable TV Operators Association said, “The new regulation by TRAI is leaving the local cable operators in the dark. There is no proper ground-work done to implement the new rules and this is not going to benefit the local cable operators or the consumers.”

He further explained, “Now, as per the new rule the consumer has to pay a basic fare of Rs 130 plus taxes for 100 channels and additional amount for other pay channels. Earlier, subscribers had to pay an amount between Rs 150- 300 for 500 channels and now when the new regulation will come into effect, they will have to pay around Rs 300-350 for 50 channels. Some of the rural population is unaware of TRAI and the new rules and regulations, we haven’t been given any information on how to educate them. If we are not able to convince those set of consumers then they will revolt against the local cable TV operators as we are the ones who is dealing directly with consumers on a daily basis.”

“The new regulations will badly affect the business of cable operators there will be a dip of 50 per cent in the revenue of local cable operators. The revenue from the advertisements are shared between the MSOs and broadcasters and we don’t get any shares from that. We have to sustain and run the network on the small percentage of revenue we are getting through the subscription. This is unreasonable and very soon the cable operators and their services will be washed away. We have a strong feeling that it is collectively planned by the government, TRAI, and corporates,” added Raju.

As per the TRAI formula, 80 per cent of MRP of a pay channel goes to broadcasters and the rest is shared between MSOs (Multi System Operators) and LCOs (Local Cable Operators). Network fee is shared in the ratio of 55:45 between MSOs and LCOs.

Raju continued, “On top of that a GST of 18 per cent is also being charged. Our requirement is to bring down it by 5 per cent and to revoke the charges. We have had meetings with officials at TRAI zonal office and they haven’t addressed our concerns. So, we have decided to go on strike on January 24. The TV screens will be blacked out between 6 am to 10 pm.”

Praveen Mohan, Chairman, KCBL (Keralavision Channel Broadcasting Ltd) also has similar views, “The TRAI has not educated the local cable operators on how to implement the new rules and regulations. The base rate of Rs 130 is decided without taking the LCOs into consideration. The LCOs will get a revenue share of 45 per cent with which the distribution network has to be managed and GST has to be paid from this 45 per cent.  In my opinion, base rate should be hiked.”

“This move by TRAI is a conspiracy against the LCOs and to favour the broadcasters and corporate firms,” added Mohan.

According to Srinivas Murthy, Vice President- Marketing, TV5 network only partial implementation of the new tariff regulations is possible.

“The execution of the new tariff in rural areas might not happen. The rural population comprises 55 per cent to 60 per cent of the cable TV consumer population and they also play a big role in channel ratings. The situation is dicey and in my opinion at present partial implementation is only possible and full fledge enactment of the tariff regulations will take another 5-6 months,” said Murthy.

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