The security problem in the use of Blackberry mobiles is in the news these days. It was surprising that after so many years of existence in the country, the Government is now wondering ‘who let the Blackberry in’ to do business in India.
But for our country there is perhaps nothing surprising about it. Foreign TV channels entered the country in 1992 and it was only in 2006, when we woke up and registered them to do business in India so that they comply with Indian laws and the government can have a share in their income generated by the country. Similarly, ‘pay’ channels came in in 1994 and only in 2004 did we think of regulating them using CAS so that there is accountability for revenue collected from consumers. Its implementation has been delayed to date because consumers are our last priority. We still wonder how to do it without upsetting the powerful broadcasters who would lose most of their revenue once the system becomes transparent.
Well, this is the way our governments work, be it UPA, NDA, or any other alliance at the center. Sometimes I feel that it is the business world that governs our country and not the government or there is always a deep conspiracy against one sector of society to benefit another. Otherwise, which explains the impractical decisions of the authorities in the chair.
TRAI made two major decisions last month that, if implemented, would affect the industry for years to come. First was the regulation of prices of cable television services in non-CAS areas and DTH networks and the second was to recommend the expiration date for digitization. Both subjects are very familiar to them, but they still made decisions so out of date that they shun any logic. TRAI has been consulting on these issues since 2004 with all interested parties.
Rate in non-CAS areas
In the case of the cable rate, after freezing the rates to December 2003, TRAI has been recommending an inflationary increase every year ranging between 4% and 7%, but now they have recommended a reduction of 10 rupees in the cable rate. subscription fee paid by a subscriber. a cable operator from its 2007 mandate of Rs 260 / – and side by side allowed the broadcaster to charge cable operators 9% more as the cost of their pay channels.
In the case of DTH, they have reduced the cost of paid content by 15% and brought it to 35% of the cost paid by small operators who imagine that cable operators are under-declaring their subscriber base by at least 65 %. I doubt that anyone, including TRAI and the broadcasters, has conducted any survey to corroborate this. Broadcasters alone assume that they should be earning Rs 15 billion in revenue from pay channels. Why assume that 100 cable connections in the country watch the 200 odd pay channels when the only survey that is worth doing by TRAI together with CMS says that on average a subscriber watches only 7 to 15 channels? It translates into a fact that a subscriber does not see more than 80 percent of the available pay channels. If this is true, then 15 percent of the revenue going to broadcasters is 100 more than they should be getting. TRAI should make them return this additional income to subscribers.
What surprises me the most is that we first allowed illegal entry into payment channels in the country, without regulation and without a delivery infrastructure. Then we make it easy by allowing them to go directly to consumers on DTH networks without going through cable operators. By postponing CAS implementation on cable networks, we have actually encouraged DTH operators (actually broadcasters) and allowed them to install HITS, cable TV and IPTV networks and at the end of the day we commend that have achieved much faster penetration into digital technology than MSO / Cable operators and deserve more incentives. As a result, TDSAT has been busy accepting litigation on the subject, almost daily, but we are still waiting for verdicts. This is how we get back to where we started, where it was a free race for all concerned. Only consumers will suffer without strong regulations.
TRAI’s second major decision was to send recommendations to the Ministry of I&B to set an expiration date of March 31, 2011 for digitization in the four metropolitan areas and December 31, 2011 for Tier I cities with a population of more than one million and on December 31, 2012 for all urban agglomerations and December 31, 2013 for the rest of the country, including rural areas.
I remember that the discussion about setting a deadline for digitization had started in 2003 when the CAS bill was passed. It was discussed at the PMO in 2005-2006 and a seven-year digitization process was recommended. TRAI itself discussed it with stakeholders and suggestions were made to facilitate the manufacturing of digital set-top boxes and headend equipment in the country and also exemption from duties and taxes to incentivize digital implementation. Unfortunately, none of these have happened to date.
No decision has been made on the previous recommendations made by the authority on the restructuring of cable television, the implementation of CAS, the recognition of cable television networks as national broadband infrastructure and the right of way to the cable networks. If this is the current state, what interest does the industry have in migrating to digital? Cable networks that have been digitized and CAS implemented in non-CAS areas are not even recognized by broadcasters for CAS area rates for pay channels and TRAI has not helped them in any way. If the government were tough in this regard, by now half the country would enjoy digital television.
Will the implementation start by simply finishing the paperwork? The only people who would benefit from such a policy would be DTH companies and telcos offering IPTV. Even large MSOs will not benefit unless the Regulator ensures adequate returns on their investments.
Does TRAI really depend on DTH and IPTV operators (in many cases they are the same) for digitization and has it given up on cable operators? Such a move will fail again. We have seen how IPTV has achieved great success also in a country where 80% of the people live without broadband connectivity. It may look great for DTH technology as projected by many sponsored surveys conducted by some foreign agencies that TRAI often believes in (some of the surveys have stated that DTH connectivity would grow twice for 2012 and four times for 2015), a Despite the fact that all DTH players believe they are bleeding. Several states have yet to impose entertainment taxes on DTH subscribers as they do with cable. Well, this could really happen if the government’s plan and TRAI’s efforts to delay the implementation of CAS on cable are successful for a few more years and allow room for DTH to build a monopoly in the distribution of digital signals.
It is time for our government to realize that what the country needs is a strong wired broadband infrastructure provided by fiber optic networks, whether owned by telecommunications companies or cable operators. No wireless technology, including DTH, BWA, or 3G, can match the speed and bandwidth of wired networks.
Cable infrastructure can do wonders for the country’s economy if given the right and timely direction. The need for the day is to give them a level playing field with CAS implementation and let market forces decide who is the winner. Only then will we do justice to the interests of consumers.