The cable industry is up in arms after the Telecom Regulatory Authority of India (Trai) has indicated bringing in a slew of measures under the proposed mandatory digitisation regime starting July 1. These measures include disallowing carriage fees, ?must carry all private channels? diktat, carriage of not less than 500 channels per Multi Service Operators (MSO) headend, and 70:30 revenue share favouring local cable operators (LCO) among others.
Sources said these measures have been discussed by Trai in its meeting with broadcaster, MSOs, and LCOs on Monday. ?Trai indicated these measures becoming a part of its proposed tariff order and recommendations on Digital Addressable System (DAS) for the cable industry. This is unacceptable for us. We are looking towards the information and broadcasting (I&B) ministry for mediation and recourse,? said a top functionary of MSO Alliance, the apex body of leading MSOs like Hathway, InCable, WWIL, DEN, Digicable and others.
One MSO executive termed Trai?s intentions as ?shocking? while another called it ?anti-industry? which may derail the entire digitisation drive of the government. Trai officials could not be reached for comments. Trai is expected to announce its DAS recommendations and tariff order by Friday, sources said.
MSOs are upset because they have invested around R1,000 crore towards the first-phase of DAS rollout covering the four metros. However, Trai?s tariff formula may give 70% share of subscription revenue to LCOs leaving only 30% which may not cover the investments made so far, MSOs said. Also, the ?must carry? diktat will mean all MSOs will have to distribute 650-plus TV channels whereas their current capacity is only 350-400 channels within which they also plan to offer value-added services like broadband, etc. The ?must carry? order will derail their plans, the operators said.
Under DAS, it becomes mandatory for all consumers to obtain a digital set-top-box in order to access TV channels. Also, it will be mandatory for broadcasters, MSOs, LCOs to distribute channels in digital and addressable format.
?We are shocked after knowing the mind of the regulator. Dropping carriage fees, making ?must carry? mandatory, and favouring LCOs revenue share over us are some of the measures which will clearly destroy the industry fundamentals. Let Trai make it official and we are ready to go to court,? said another MSO Alliance executive. With digitisation and addressability the menace of carriage fees will die a natural death so where is the need to ban it, said a broadcaster.
The R3,500 crore Carriage fees business is simply the money paid by broadcasters to MSOs for carriage of TV channels on specified slots for wider reach. This helps broadcasters command higher advertising revenue while MSOs get upfront money.
Stakeholders are also upset with the ?must carry? diktat that Trai intends to issue for private channels as well. ?Cable Act makes the carriage of Doordarshan channels mandatory for all. The ?must carry? order for private channels cannot be forced on us. We cannot be forced to carry all channels. It goes against the right to do fair business,? said a regulatory and legal head of a leading MSO firm.