A RESURGENT CABLE INDUSTRY

IN A POST CAS ERA

AN OVERVIEW

In the past 12 years, the Indian cable TV industry has grown from zero base to approximately 45 million homes. The Indian Readership Survey revealed urban cable penetration to be approximately 84.7% and rural cable penetration to be about 32.7%. The FICCI- Andersen report for 2002 estimated total TV revenues at Rs. 9400 crores. The TV segment is estimated to grow to Rs. 22000 crores by 2006 with the cable TV segment growing to Rs. 10,400 crores. Satellite TV broadcasters using cable systems have earned approximately Rs 4500 crores with the expected growth of revenues to double by 2006 largely on the strength of cable subscriber revenues. For the past 3 years, the Indian Cable TV industry was plagued with blackouts by broadcasters, protests by customers and a worsening situation due to frequent rises in pay channel fees by broadcasters. They, on the other hand, accused cable operators of under declaration to justify both blackouts and frequent rises. All this will come to an end by the passage of the Conditional Access System regulations in the Cable Act.

The government and the Hon’ble Minister have clearly declared their concern to keep customer concerns paramount in mandating the implementation of CAS. The Indian cable TV industry is in full agreement with this intention of the government and promises to take all steps necessary to ensure that customer interests are kept as the primary focus. To do so, the Indian cable TV industry requests early action of the Ministry of Information and Broadcasting on the following issues:

· The government has already appointed an implementation Task Force to determine issues relating to free-to-air channels, genre based channel mapping and the balance roll-out plan for the balance cities. The Cable TV industry requests early notification on all these pending matters by the end of February 2003 so that the CAS rollout is expedited.

· The Cable TV industry has already requested the Ministry of Information and Broadcasting to request the Ministry of Finance to treat the Cable TV Industry as an information infrastructure industry and provide appropriate import and excise concessions in the entire value chain right from headend equipment to conditional access systems to subscriber management systems to set top boxes to ensure provision of pay cable service at the cheapest possible cost to the customer.

· As government has decided to fix a maximum retail price for free-to-air channels, it should, in fairness, freeze all current pay channel rates as on 1/1/2002 till CAS comes into effect in the various cities.

• Once CAS comes into force, the broadcasters will have to persuade the customers to subscribe to pay TV channels on the strength of attractive content and value for money pricing.

• The issue of entertainment tax levied by state governments is another area of concern for the Cable TV industry. Currently it varies between zero in Himachal Pradesh to Rs. 30 per subscriber in Maharashtra. The CAS regulations give a choice to a customer to opt for only FTA or some pay channels or the entire bouquet of pay channels. In near future video on demand and pay per view will be technically possible. In such a varied scenario, it would be necessary to link levy of entertainment duty to the category of service provided to the customer.

• The CAS regulations have already led to the issue of guidelines for both analogue and digital set top boxes by the Bureau of Indian Standards. The Cable TV industry has already started surveying customer demand and is in readiness to provide both analogue and digital set top boxes as per the need of the customer. The mantra has to be affordability to the customer. It is not necessary to mandate either of the two technologies.

• The Convergence Bill is still being scrutinized in the Ministry of Communications and its passage is uncertain at present. The Cable TV industry is therefore requesting the Ministry of I&B to create an interim arrangement to settle all possible disputes between broadcasters/cable operators and customers by setting up an ombudsman being a retired Supreme Court judge or a well-known public figure.

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Cable Sub Committee

New Delhi.