Wednesday, 8 January 2014

Five Million Illegal DTH Connections

Speaking at a conference at the Karachi Press Club last October, leaders of Cable Operators Association of Pakistan, Abdul Jabar Khan, Ghufran Mustafa and others said that at least 2 million illegal Indian DTH/Dish TV had been sold in Pakistan through which the banned Indian channels were being seen in the country. They pointed out that India was earning billions of rupees through these illegal DTH devices. They said PEMRA (Pak Regulator) had issued licences to cable operators after they had got themselves registered with the government, but DTH/ Dish TV devices were being illegally sold in Pakistani markets. The COAP leaders called upon the government to put an immediate ban on the sale of illegal DTH/Dish TV devices.
Thousands of households in Pakistan are illegally buying subscriptions to various Indian direct-to-home platforms by illegally transferring money to India through ATMs in Bihar and adjoining areas. The connections are bought through some operators in Pakistan who get the PIN numbers of the DTH connections from some Indian locals.   The equipment for these services is easily available in various parts of Pakistan including Hall Road in Lahore for a few thousand rupees. These are mostly purchased by cable operators who sell Indian channels to their customers as there is a huge demand for them in Pakistan, though some individuals have also bought these dishes. Initial installation of Indian DTH in Pakistan costs about Rs 3500 and further payments for renewal are done online through accounts in Singapore or another country. 
With the rise of LCD and LED sale in Pakistan, the demand for high definition content has increased and people are no more finding the conventional cable very much according to their requirement. Therefore, demand for DTH equipment is rising. According to a Pakistani press report, Indian newspaper “The Telegraph” had earlier reported in 2011 that money for the DTH connections is deposited into the bank accounts of the locals in Bihar and its adjoining districts. The money is withdrawn through ATM cards and is used for purchasing the coupons of Direct-To-Home (DTH) services such as Tata Sky or Dish TV. The PIN numbers of these coupons are then sent to some “Barde Sahib” who, according to the local police of Bihar, resides in Pakistan.
The report further states ‘Indian police says these bank accounts are opened in the name of poor local residents of the district who get Rs 5,000 per month for letting brokers use their accounts and ATM cards. According to the investigators, the PIN numbers of these coupons are sent to Pakistan and other neighbouring countries through SMS and Emails. 
The Indian Police has arrested some local shopkeepers who sell DTH recharge coupons. One of the shopkeepers said he sold Rs 1.5 million worth of coupons. Another shopkeeper sold Rs 400,000 worth of recharge coupons in just 10 days. Pakistan Government is also worried about this piracy as it adversely affected their own market. As stated by PakSat CEO Usman Bajwa, one of the most important challenges for PakSat to overcome is piracy. According to him, “a significant number of Pakistani households are already illegally receiving Indian DTH services.  Indian DTH has basically filled a vacuum over a period of last seven to eight years, because of the unavailability of Pakistani DTH platforms. There is now increasing demand from the industry to take appropriate legal and regulatory measures to address this issue,” said Bajwa. Recently, Pakistan had alcso banned reception of all Indian TV channels.
Bangladesh story is the same. There are dealers claiming to be ‘authorized dealer’ of Indian DTH services and install the equipment in interested party’s home within Bangladesh. They provide all types of DTH set-top boxes including HD channels, 3D channels etc. with one year warranty of all the DTH providers, smart cards, recharge coupons, online recharge facilities on demand. A Tata Sky HD set-top box in Bangladesh is provided at Tk. 12,500.00 BDT.
Bangladesh and Pakistan do not have DTH yet but in Nepal it is the local DTH operators who along with their government are fighting against the illegal DTH service from India. The government along with the DTH service provider in the country have removed thousands of DTH sets on the grounds that they were illegally installed. Following instructions from the Ministry of Information and Communications (MoIC), the Home Ministry started raiding houses to remove DTH sets of Indian companies. To promote their own service, Dish Home a Nepalese DTH player replaces the Indian DTH equipment in Rs 2,000 only whereas new subscribers need to cough up Rs 5,000 for the installation. 
Although it is against the law in Nepal to use DTH offered by Indian companies, customers are using Indian DTH services like those from Airtel, Tatasky, Dish TV and others, citing reasons like lower cost, a-la cart options, and large number of channels.  This practice started much before the Nepal DTH operations started. After a secretary-level decision in 2005, the use of foreign DTH was made illegal. Subscribers using illegal DTH can be punished under the existing Customs Act 2007. As per the Act, the government can treat such subscribers as smugglers, seize the equipment, and ask for a penalty worth the price of the equipment or send to imprisonment up to five years. 
In Srilanka the situation is different. Dish TV of Essel Group is planning to invest Rs 700 million in Dish TV Lanka, a joint venture company in which it holds 70 per cent stake while local partner Satnet Private Limited has the other 30 per cent. Dish TV received the shareholders’ approval to invest Rs 700 million in the venture in 2012. 
Dish TV has not created a broadcasting centre or satellite link facility yet. The company, however, plans to enter into the Sri Lanka DTH market at some stage as the ARPUs are much higher. The DTH market in Sri Lanka is much smaller than India but while the ARPUs in India are in the range between $3 and $4, in Sri Lanka it is close to $9. Dish TV Lanka was incorporated on 25 April 2012. The minority partner Satnet has a DTH Licence in Sri Lanka.
There is no proper way of restricting signals in the adjoining areas or countries as DTH has a wide area of reception. Although satellites beams that carry DTH signals are restricted over the Indian land mass, some signals do spillover to neighbouring countries. The only way to stop these signals is to ensure that each and every STB and smart card sold to individuals in India should not go out of the country. This can be only stopped by the DTH operators since they sell this equipment. Like in other countries, DTH STBs are available in the open market. Also each and every smart card is activated only by the DTH operator after details of the subscribers are entered into their SMS (Subscriber Management System) of the operators.
Since all these activations are done on prepaid cards, one solution is to stop all prepaid payments for the DTH service.
Another action required is by the regulator to ensure that each and every DTH operator activates the smart card only after getting the ID and residence proof of the subscriber like it is mandatory for a mobile subscriber.
Another aspect where impact of such illegal connections in large numbers is felt is the DTH connectivity projected in various reports by TRAI as well as many research agencies who project a rosy picture so that investments can be lured into the DTH ventures. About 5 million illegal connections in DTH service count for more than 10% of the total connectivity. If we also substract the inactive connections (reported to be 33%) we land up with just 30 million connections with six DTH operators, no doubt all of them cry to be in the red. All payments from abroad are through gray channel, not accounted for in the audited accounts of the companies, being illegal.


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