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Spat over new annual contract: ESS threatens to switch off signals

05-January-2004
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Spat over new annual contract: ESS threatens to switch off signals

The fight seems to be a never-ending one. What seemed to have ended amicably during the fag end of 2003, has started again. Come New Year and the row between ESPN Software (ESS) and Indusind Media & Communications cable arm ‘InCable Net’ continues.

ESS has again indicated that it may switch off its signals to Incable Net if it fails to sign the new annual contract for the year 2004 - effective from January 1, 2004. But, this time the switching of signals could be across the country and not for Mumbai alone.

In a letter sent by ESS to InCableNet on Saturday January 3, 2003, the company said that the agreement in place had come to an end on December 31, 2003 and that the cable company has to sign a new agreement if it wanted ESS to resume its services.

ESS, in its letter, gave Incable Net a deadline of 5 p.m. on Sunday January 4, 2004 for reverting on the issue failing which it said, “We shall be constraint to take all necessary and relevant steps.”

When contacted, Sricharan Iyengar, VP-Affiliate Sales, ESPN Software says, “It’s a monopoly situation on ground. We have been negotiating with Incable Net asking them to sign a new contract effective from January 1, 2004. The deadline has come to an end and Incable Net has not yet reverted back to us on this matter.”

In response to ESS’ letter, InCableNet dashed off a reply bringing to notice certain old ground realities regarding the difficulties it was facing in collecting monies from the ground. The MSO also mentioned that it has been constantly putting forward this point to ESS. The three main points that it highlighted in its reply are: ·

1. Our present declared base to you in Mumbai exceeds our paid connectivity. ·

2. Consumer resistance to increasing pay TV rates continues to be a strong disincentive to increasing rates. ·

3. Your “best rates and favourable terms” imply an increase of monthly pay outs by 36 to 40 per cent and with substantial upfront payments.

“In view of the above, we have outlined 3 alternate proposals which we had asked you to consider,” the reply states.

As of now, the negotiations are for the Mumbai market only. But, this could extend to other markets too. Iyengar says, “We are ready to give Incable Net our services and have also revised the tariffs. We are also offering them lot of incentives. But, they are not agreeing to the new package and insisting on paying us according to the old rates that were signed two years ago. They do not seem to be agreeing to this. All I can say is if they do not want my product I cannot force it upon them to buy it.”

He further adds that the Hindujas are neither agreeing to an increased subscription rate of Rs 39.70, nor are they agreeing to an increased subscriber base. “They claim that they are not collecting more money from their operators. But, that is in no way our problem.”

Further in its reply, Incable Net also states that since a meeting between the two parties has been fixed for Monday January 5, 2004 at 1 p.m. to discuss and renegotiate on this matter, it did not understand the purpose of the letter issued by ESS. InCableNet further states that as per the understanding reached between the two parties on December 14, 2003, disconnection requires seven days prior intimation.

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