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Consumers' delight could prove to be Multi-System Operators' dilemma.
On Monday, the Telecom Regulatory Authority of India (TRAI) had issued an order making it mandatory for MSOs to carry a minimum of 500 channels by January next year. This was to give consumers ample choice.
However, MSOs, particularly the smaller players who are aggrieved at the order, say this will lead to higher investment outlays.
Ms Roop Sharma, President of the Cable Operators Federation of India (COFI), said, “Direct-to-home service providers are not mandated to carry 500 channels. Asking digital cable operators to carry 500 channels is discriminatory.”
According to her, the revenue share agreement norms could make the business of smaller cable operators unviable. Even as the bigger MSOs have been given a January 2013 deadline, TRAI has given a three-month extension to smaller MSOs with less than 2,500 subscribers – their deadline is April 2013.
Most multi system operators were expecting to go digital with a capacity to carry 300 channels.
Mr S.N. Sharma, Chief Executive Officer, DEN Networks, said, “The latest guidelines have cleared several ambiguities in the minds of the stakeholders. However, there are certain grey areas such as mandatory norm to carry 500 channels which will increase investments on head ends as well as channel transportation costs.”
According to TRAI's new norm, MSOs will have to offer a minimum of 100 free to air channels for Rs 100 as part of the basic service tier. Though the revenue share is based on mutual negotiations but in case of disagreements MSOs will get 65 per cent of the revenues while the balance will be shared by local cable operators.
Mr K. Jayaraman, Managing Director and Chief Executive Officer of Hathway Cable & Datacom, said, “The order (TRAI's Tarriff Order for Digital Cable) is expected to provide an impetus to digitalisation but mandatory norm of carrying 500 channels will require additional investments. While return on these investments could be a challenge in the short term.”
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