Star acts pricey, hikes cable subscription rates

In a volte-face, Star TV has announced a hike of Rs 12 in cable subscription rates for its digital bouquet of six channels, with effect from January 2002.

Star, which had announced its intention to lower rates earlier this week, will charge cable ops a basic rate of Rs 42 per subscriber, as against an average of Rs 30 now, when the rate hike becomes operational. The channel has taken a decision to make the announcement currently because its contracts with some cable ops stipulate that a 60 day notice period be given to them if a rate hike is being resorted to.

The move is likely to have a ripple effect on how much individual subscribers pay for receiving cable TV in their homes: observers expect cable ops to eventually hike the rates they charge subscribers from Rs 75-Rs 175 prevalent currently to Rs 100-Rs 225 (depending on whether the subscriber is in a posh or poor locality). This translates into a hike of Rs 20-50 per subscribing home.

That is after the dust settles down. Observers expect cable ops to get into a major scrap with Star India's distribution team for daring to take the step to hoick basic subscription fees.

And that too when Star India CEO Peter Mukerjea had as recently as two days ago declared in the media that his network was planning a cut in basic subscription rates, if cable operators were willing to disclose higher subscriber bases. Mukerjea's justification of the new hike is that operators did not respond to the channel's clarion call.

Star India CEO Peter Mukerjea

Mukerjea told The Times of India: "We have 38 million cable homes across the country and we receive payment for just 6 million cable homes. Because of the under declaration of subscribers by the cable operators, we have no option but to increase prices.''

Mukerjea said that they are charging the cable operators and not the end subscribers. ''It is sad that just 6 million subscribers in the country share the cost of 38 million cable homes. Cable operators and MSOs have to declare true figures,'' he added.

Mukerjea said that Star is ready to cut down its subscription cost once they get a reasonable declaration from cable operators. ''It is our long-term strategy to cut down prices. For that we need true declaration from cable operators,'' he said.

While the news of the hike comes as a surprise to many, had predicted earlier this week that the proposed cut in rates was an eyewash and that Star would be hiking rates shortly.

In its latest issue of The Indian Cab & Sat Reporter, a weekly subscription newsletter, had foreseen that `once cable ops refuse to buy into his (Mukerjea's) scheme, he is going to propose a hike in subscription rates for cable ops at the existing subscriber levels.' The prediction came true in three days.

Star Plus has a lion's share of Indian cable & satellite viewership and is the numero uno satellite channel by far. It leads the number two Hindi entertainment channel by a factor of two and the number three by a factor of almost three, while it trails its rivals in the news category. Overall, nine of the top 10 slots for Hindi entertainment programmes are occupied by Star India's shows.

The announcement of the hike comes close on the heels of I&B minister Sushma Swaraj's indication at the FICCI meet this week that the government is thinking of restricting advertisement telecast on pay channels.

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