| The MSOs had met the minister to petition him on CAS
- to say that the uncertainty over it has caused "further confusion"
and will have grave financial implications for the industry.
According to government sources, Prasad, even while listening to
the MSOs, made it amply clear that he was not pleased with the way
they had handled the situation vis-à-vis cable operators.
Those who were present at today's meeting included Zee Telefilms
vice chairman Jawahar Goel, Siti Cable's Rajiv Khattar, INCablenet's
Rajiv Vyaas, Hathway Datacom CEO K Jayaraman, the company's vice
president for North
India, SN Sharma and a senior executive from PGNetcom.
The I&B minister also hasn't given any assurance on facilitating
an extension of the tax exemptions on importing set-top boxes (STBs).
The tax sop extended to the cable industry on imports of boxes ends
on 30 September.
The MSOs, however, in a memorandum, have stated that the implementation
of CAS has become uncertain in the cities of New Delhi, Mumbai and
Kolkata and would cause "irreparable damage to the industry,
government and consumers".
Pointing out that as an industry, cable television was hardly regulated
- leading to lack of transparency and chaos - the memo says, "CAS
would have been one golden opportunity for the industry to have
got rid of the above issues. As MSOs, we have all invested and also
opened up irrevocable letters of credit totaling to an investment
level of Rs 8,000 million. Thus, the delay in implementation is
going to make the MSOs and the industry bankrupt. There will be
a situation of sovereign default, loss of employment and the respective
shareholders losing all they have invested."
The memo states, "With the uncertainty, there will be further
confusion when pay broadcasters will increase the prices around
November/December 2003," adding that this would lead to consumer
protest, non-recovery of subscription money and, therefore, "disruption
of services".
"(The) cable subscription rates will shoot up as a consequence,"
the MSOs have warned, even while wisely pointing out that the delay
in implementation and uncertainty will cause the government to lose
hundreds of
crores of revenue as taxes by way of service/ entertainment taxes.
"We request your good offices to sympathise with the MSOs
who have invested such large sums of money in order to comply with
government's statute, so that CAS implementation in the cities of
New Delhi, Kolkata and Mumbai are not delayed beyond November 1,
2003," the memorandum ends on a note of plea to the government.
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