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This, the COUF in a memo to the information and broadcasting minister
today has pointed out, will lead market forces and competition to
push down the price of the free to air channels in the basic tier
in a post-CAS regime over a period of time.
"Different conditions prevail in the four metros, therefore a
single price structure would not be an appropriate answer to the
problem. A flexible pricing would keep the cable operator above
the water in a post-CAS regime," the memo states. "A higher FTA
pricing, if fixed, would drop automatically with competition to
a level of universal acceptance and viability, not killing healthy
competition in the bargain," the memo adds.
According to calculations done by the finance ministry - something
that was also intimated to all the task force members - the costing
of 60 FTA channels for a subscriber base of 30,000-odd comes to
Rs. 45.90, exclusive of local and entertainment taxes. Even then,
if agreed upon, this price is likely to be much below Rs 100.
The Cable Operators United Front (COUF), comprising mostly independent
cable operators, has also decided to hold a dharna tomorrow in Delhi
to vent their "frustration" in failing to convince the
government on a "fair price of the basic tier."
As reported by indiantelevision.com yesterday, the cable operators
have also threatened a black out of cable services in the metros
if the government fails to lend a sympathetic ear to their grievances.
According to a senior member of the COUF: "We have been pro-active
where CAS is concerned. But now it seems that the broadcasters are
hijacking the issue and somehow have managed to convince the government
that the parameters used for costing are correct. But these are
far removed from reality and we cable operators must unite."
The broadcasters, of course, are keeping mum on this uproar.
Speaking to indiantelevision.com in Mumbai, Federation of Cable
Operators Association president Ravi Singh said the very basis on
which the government had made its calculations - a subscriber base
of 32,000 - was incorrect. Even in metros like Mumbai, the average
local cable operator (LCO) had a subscriber base of around 5,000
and as you go away from the metros, it could only come further down,
Singh said. It should be based on these considerations that that
a formula is devised, Singh added.
The COUF memo listed 10 assumptions the government has made in
its costing that were "unrealistic":
1. For every 1,000 subscribers only one employee (for service and
collection).
2. Single office in 154 sq. km. (Radius is 7 km).
3. Size of network is for 32,000 subscribers.
4. For whole network and office electricity expense is Rs1.40 per
sub per month.
5. No pole charges (for tying cable) to state electricity boards.
6. No promotional activities expense.
7. Network is without competition.
8. Telephone and other communications expenses is Rs 0.43 per sub
per month.
9. No tea or other staff welfare expenses.
10. No insurance for the staff.
The COUF memo paints the "real picture" thus:
1. Most cable TV operators are small self-employed businessmen.
2. On average LCOs have not more that 500 subscribers.
3. Average cable network spread 4 sq. km (radius 0.8 km).
4. Cable networks face an average three competitors in the area.
5. For every 500 subscribers there are four employees and 1 cable
operator.
6. Cable TV offices are not more than 1 km from any subscriber.
7. 7,000 cable ops in four metros employ approximately 35,000.
Will the government relent? We should have some answers on Thursday,
the 27th.
Also Read:
Fragmented
cable ops threaten blackout
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