(20 September 2005 10:00 pm)

MUMBAI: Maharashtra revenue minister Narayan Rane is threatening to take action against cable operators who underreport their subscriber figures. The way out: a survey to expose the actual cable TV subscribers in Mumbai or even a hike in entertainment tax.

Mumbai including Thane city and Navi Mumbai have around 3,000 cable operators servicing approximately 3 million homes. The declaration of cable connections, according to government officials, is 500,000. The state government charges Rs 30 a subscriber. "The cable operators have been cheating the government for a long time. The time has come to act. The state government is generating about Rs 800 million through entertainment tax from cable operators. And I am sure that with the alternate system, the revenue would go up at least four times," Rane told one of the leading newspapers in Mumbai.

The alternate system Rane is hinting at is direct-to-home (DTH) service. The cable industry, however, rejects this as an unrealistic option. The multi system operators (MSOs), in fact, see the introduction of set-top boxes (STBs) as the answer to all the evils of underreporting.

"Let the government mandate STBs for pay-TV viewing. That will take care of gross under-declarations. The government will have a transparent system and entertainment tax collections will augment," says the head of a leading MSO in Mumbai.

Local cable operators, however, are worried about Rane's possible drive at forcing operators to increase declarations. "If the government seriously clamps down on operators, subscribers will have to pay higher cable TV prices. The current rates are possible because underreporting is factored in. The monthly rates could shoot up to Rs 500," says Federation of Cable Operators Association president Ravi Singh.

A worse implication could be if the government decides to hike entertainment tax for cable operators. "This would be unfair as those who have a higher declaration of their actual connections will have to suffer more," says Singh.

Singh, however, is willing to discuss the issue of underreporting with Rane and the state government. His association, along with CODA (Cable Operators and Distributors Association), is planning to meet Rane. "We will seek an appointment with Rane We can discuss what kind of cooperation we can extend to sort out the issue," says Singh.

CODA president Anil Parab believes action can follow only after Rane has made his proposals clear. "We do not know what his proposals are and how he is planning to increase the declarations. It is only then that we will decide on what action to take," he says.

A section of the industry has welcomed Rane's drive to increase declarations. "If the government succeeds, it will be best for the industry. The broadcasters, though, will gain the most," says Jagjit Kohli, a veteran in the cable TV industry.

A survey of the actual connections of the cable operators, however, is an uphill task. Earlier governments have also lacked political will to head for a transparency system. The idea of hiring a private bidder to take charge of declarations has also been toyed with but without success. "That wouldn't have been a good system as other elements would have come into play. Many in the industry would have felt that the private bidder wouldn't be fair as it would be in his interest to extract the maximum profit. If the government does this on its own, it will be a different ball game. The government, however, has to figure out how it can get this survey done and how it can be implemented," says Kohli.