Mumbai MSOs reach common cause on hike in subscription rates

How well it will work in the rest of the country remains to be seen. But the leading cable MSOs in Mumbai have decided to work jointly to implement an across the board structured increase in cable television subscription rates. The process, which kicks off on 1 May, will see monthly subscription hitting an upper slab ceiling of Rs 360 within the next six months.

The hikes, which are being instituted as part of a two slab structure linked to locality and paying capacity, will mean subscribers will have to pay Rs 300 per month in the lower slab before the year is out or face disconnection.

All the leading cable MSOs in Mumbai - Hinduja Group's IncableNet, Rajan Raheja's Hathway Cable & Datacom (in which Rupert Murdoch's Star India officially has a 26 per cent stake), Wincable (in which Hathway holds almost 100 per cent stake), Subhash Chandra's Zee Group cable arm Siticable, and Seven Star Networks Ltd - have decided to implement these rates.

There are some reports that certain building societies in south Mumbai have issued notices to their members opposing the move saying they will not accept a rate above Rs 250 a month. However, Anand Patwardhan, chairman, Consumer Guidance Society of India (CGSI), was of the view that because cable companies had formed what he termed a cartel, there was little chance of serious opposition from consumers.

The bedrock of this deal is that the big cable companies will have to adhere to a no-poaching agreement wherein they stick to their own turfs. The unique way the Indian pay TV market has grown has meant that Indian MSOs have fought to get control of local cable operators, to make sure that they gain maximum subscriber households. Local cable operators have in the past used it to their benefit by playing one MSO against another. 

As to whether this formula would be applied in other parts of the country, the word is that these issues are being looked into.

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