Trai looking to relax cable pricing mechanism once DTH kicks in

MUMBAI: Telecom Regulatory Authority of India (Trai) chairman Pradip Baijal has expressed the hope that once the Tata-Star DTH platform T-Sky launches next year the market would explode with three players. It would provide some much needed competition to cable.

When there is competition, at least at the upper end of the market, Baijal said Trai could then look at relaxing the pricing mechanism for cable.

Right now the price is indexed to the inflation rate. Baijal stressed the importance of regulating the industry in a way that did not impede growth. The job of the regulator, he said, was to ensure that the market mechanism encouraged healthy competition. He noted that the cable model does not allow for competition at the home level. The argument that there should be two cable lines in one area that will allow for consumer choice is not a feasible solution, according to the Trai chief.

Baijal was speaking this morning while inaugurating the 14th edition of the cable television tradeshow Scat which kicked off in Mumbai.

As for IPTV, Baijal pointed out that while at the moment it is difficult to know about a viable business case, eventually internet streaming of television content would happen. It is just a matter of upgrading the network. He pointed out that at one time there were doubts expressed about voice calls through the internet.

To illustrate the benefits of a regulatory regime, he gave the example of the telecom sector. From 1948-1998 there was a two per cent achievement in teledensity. However, since then each year around two per cent has been added. He however pointed out that regulation takes time to take effect. Trai had recommended regulations for the telecom sector in 1997 and the effects were felt from 2000. Trai only started regulating cable television from last year.

He expressed concern that broadband had still to take off despite a broadband regulatory framework being put in place last year. He is hopeful that the rural telecom regulations that have been put forth will be accepted by the government. The regulations suggest among other things the setting up of a broadband mechanism for rural areas.

Trai has also put forth recommendations for unified licensing in the cable TV arena. If this goes through then technologies like set top boxes that are on display at Scat will be useful. The cable TV network could then be used to provide interactivity. Baijal said that the regulator recognises that cable TV, voice market and broadband can co-exist.

As far as the vexed Cas issue is concerned Baijal says that while Trai has put forth recommendations on the same it is doubtful whether it will come about as a government effort. It will need private operators i.e. cable ops, broadcasters to come together and work out a solution. He noted that in Chennai a special set of circumstances had enabled Cas to come into effect. Trai is till working on issues like whether clubbing together of channels should be allowed, he noted.

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