NEW DELHI: Cable rates are set to go up by seven per cent (basic tariff excluding taxes) from 1 January, 2005.

According to a statement released by the Telecom Regulatory Authority of India (Trai) today, the cable subscription price ceiling that has been in effect since 26 December, 2003, is being revised taking inflation into account.

On the basis of analysis done by the Authority, the rate adjustment for inflation works out to seven per cent. Accordingly, it has been decided that an amendment Order be issued that provides for revision in the ceiling on account of inflationary adjustment. This upward revision will be be effective from 1 January, 2005, Trai said today.

Thus, the new rates will apply for payments to be made by consumers, cable operators, multi system operators for the month of January 2005.

The seven per cent increase will apply to the charges, excluding taxes, payable as on 26 December,2003.

Thus, if the payment was Rs 220 per month as on 26 December, 2003 of which Rs. 20 was on account of taxes, the seven per cent increase will be applied on Rs 200 and an increase of Rs14 per month would be the maximum permissible increase to the basic charges, excluding taxes.

The industry has shown mixed reactions to the Trai provision for a seven per cent increase in subscription rates across the board. Says Star India chief executive officer Peter Mukerjea, "A seven per cent rise is ridiculous and unacceptable. It is not even matching the rate of inflation when taken over a two-year period. Other costs have gone up. The regulator shouldn't be regulating price."

Sony Entertainment Television India chief executive officer Kunal Dasgupta, however, welcomed the move. "For one year, we could not raise rates at all. Now at least we have a seven per cent increase."

The cable sector has expressed limited optimism. Says Siticable head Jawahar Goel, "Something is better than nothing," he says. "However, unlike Siticable, others may not be so positive about the new development."