Cable TV

Tony D’silva draws up wishlist for MIB

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MUMBAI: The Information and Broadcasting Minister (I&B) Prakash Javadekar wants a happy Media and Entertainment industry. And for the same, he has been meeting the members of the industry personally to understand their concerns and devise a way forward.

The cable TV industry, which is currently undergoing digitisation, is looking up to the Minister for a better tomorrow. While digitisation of the 120 million cable TV homes in phase III and phase IV took a backseat with the general elections, so did the launch of the Headend in the Sky (HITS) by Grant Investrade, a 100 per cent subsidiary of Hinduja Ventures.

Now with the Ministry throwing some clarity on the next two phases of digitisation, Hinduja group on Monday paid the Rs 10 crore licence fee to the Ministry to move things forward. But, this isn’t all, with this, the expectations from the Ministry has also risen.

In a conversation with indiantelevision.com, IMCL MD & group CEO Tony D'silva lists down his wishlist from the new government and especially the I&B Minister.

  • The I&B must demonstrate its commitment to digitisation by immediately announcing the future dates of the remaining two phases.
  • According to me, unlike phase I and phase II of digitisation, the government should consider digitising not phases, but complete states. This will also avoid the confusion of neighbouring markets like Hyderabad / Secunderabad, Mumbai and suburbs, Delhi and surrounding markets as well as prevent piracy of signals.

The advantage of doing state-wise digitisation is that if the whole state is involved, the state government can easily estimate its revenues and join forces to ensure implementation. (Similar method was followed in some other countries).

  • Broadcaster pricing needs to be worked out more meaningfully in states that are not yet digitised. From my understanding for most broadcasters, phase I and II contribute at least 75 per cent or more of their existing revenues that is from approximately 30 million homes. This means that the rest 25 per cent or so of their business comes from the 100 million- 120 million homes that fall in the next two phases. So when you look at the ratios, then what really should be the pricing of the broadcasters? Broadcaster pricing is the key to the success of digitisation in phase III and IV.
  • The broadcaster pricing has to be different. It has to be territory wise and therefore, digitising a complete state is more feasible. The MSOs, broadcasters and the TRAI can sit and discuss in an environment which is more transparent and also come up with pricing which is more viable for phase III and IV.
  •  The Hinduja group is committed to invest over $100 million, to set up its HITS business, which is a white label backend service provider to support the smaller operators and help them retain their business and livelihood (the industry employs a few million people), hence it’s important to support the LMO. The group has already invested a couple of crores on the project, but needs a confirmed date for digitisation, before its expense meter starts ticking (transponder payments etc).
  • While we do support the government’s effort to encourage indigenisation of set top boxes (STBs), the government should also ensure that it is offered at comparative or better terms than international suppliers (price, credit facilities, repairs, servicing etc). A roadmap for future high end STBs should also be provided.
  • One of the key players in the value chain is the LMO. Enough by way of regulation and processes has not been done for them as yet. This needs a complete relook in light of the present situation in phase I and II markets.
  • I believe that one of the key objectives of digitisation is consumer choice. Government must insist on the prepaid model along with packaging of channels from day one of digitisation in phase III and IV markets, or else we will face the same problems like the ones in phases I and II.
  • The LMO has been the backbone of the C&S industry. In view of this, the government must find a way to encourage them to grow their business. The current licencing policy is completely against the interest of a small LMO. I fail to understand why an operator who has existed for years in the market is asked to get a fresh licence from the centre?  I can’t understand if he is a pan India operator, who already has a licence and has a registered business and is even paying his taxes, then why should digitisation change his status?

If he does not comply with the guidelines, action can be taken by the regulator or the market forces will anyway drive him out of business as there are alternatives to consumers like DTH etc. This needs some immediate intervention.

  • The industry is heavily burdened with huge investments due to digitisation. Investments have been made in headends, backend services and STBs, among other things. I earnestly request that the C&S business be given an industry status. Also a relief from double tax: service tax and entertainment tax is needed. Reduction in import duties is also a necessity as it directly affects the customer. Also the entertainment tax needs to come down. It should be a percentage of the package the customer chooses, rather than have one set rule for all the households.
  • Another issue is of TRAI’s current regulation on de-aggregation. While the regulation was supposed to help the MSOs, it has had an adverse effect. So, I would like to appeal to the broadcasters and the authorities to intervene and bring about the reasonable pricing model that facilitates business. The broadcasters need to take a long term view of how they can monetise the content, because the old theory of everyone wanting to be on the basic pack cannot work anymore.

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