Kolkata LMOs to join hands with smaller MSOs

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By indiantelevision.com Team Posted on : 04 Aug 2014 06:02 pm

KOLKATA: Cable TV industry in Kolkata is up for some change. The last mile owners (LMOs) who have for long been complaining about losing their consumers to the multi system operators (MSOs) because of digitisation, are now looking for different ways of retaining their customers. While it had started with setting up of cooperatives, the LMOs are now joining hands with the smaller MSOs, who are also DAS licence holders.
 
As part of this arrangement, a group of LMOs will sign a Memorandum of Understanding (MoU) with the MSO. While the group will have access to the headend, SMS and other backend services of the MSO, it will be free to create its own packages and also bill the consumers. This will also help the LMO to own its customers.
 
“We have already prepared an agreement with a DAS licence holder who will levy a minimum price against every set top box (STB) that we take from him. Joining of other LMOs is in progress,” said an enthusiastic LMO on condition of anonymity.
 
According to market sources, some of the MSOs that may get into such an arrangement are Sristi Cable TV Network, Kailash Cable Network, Meghbela Cable & Broadband Services and Barasat Cable TV Network. The smaller MSOs are looking at increasing their topline and bottomline and strengthening their presence in the region by partnering with the LMO group.
 
“LMOs will partner with DAS licence holders either by forming a cooperative or working independently with him using his network,” informs a cable TV industry source.
 
Meetings in this regard had started a year ago between the two parties operating in the KM area which currently has close to 33 lakh digitised cable TV homes. The LMOs will not be swapping the STBs in the current digitised homes, but will try and capture the new homes which have not yet been digitised.  
 
The partnership will give the LMO the power to bill its subscribers, create packages based on consumers’ choice, and get a share of carriage fees as well as ownership of STBs.
 
Cable Operators Sangram Committee general secretary Apurba Bhattacharya while confirming the development said, “It is good that LMOs are looking for new business models to earn their living. The operators are happy to get into this space. We will run the business ourselves.”
 
LMOs in Kolkata are moving to this arrangement, since setting up of a headend not only takes time, but is expensive as well. “Setting up the headend requires a lot of permissions and an investment of some crores, so it is better to get into partnership with existing DAS licence holders than to set up our own headend,” says a LMO.
 
A last mile owner who is in talks with one of the smaller MSOs concludes, “During the analogue regime, the revenue share between the MSO and LMO was 20:80 but after digitisation, this has come down to 65:35. The business model is not at all lucrative anymore.”

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