Friday, 9 October 2015

No Level Playing Field for Regional MSOs

A regional MSO highlights the problems faced by the small MSOs, trying to become DAS MSO.
CQ: How long have you been a Cable Operator/MSOs? When did you get the licence to operate as a DAS MSO?
Jeevan Khanna: I am a cable operator since 1993 and MSO since 2009. I received my License in December 2013 after a hard struggle of 8 long months.
It took 8 months because I had applied after the cut off date fixed arbitrarily by the Ministry for Phase II. As per the Ministry I was not entitled for even a provisional licence although the deadline for Phase III is December 2015. This forced me to approach the Lucknow High Court so that I could continue to do my business. 
Main hurdle is the security clearance by the MHA which I feel is unnecessary for people like us who have been doing this business for so many years and paying taxes to the state as well as central Government. 
CQ: What is your view on the registration process, considering that in last two years only 372 MSOs have been registered? 
Jeevan Khanna: As I said above, the Registration process has been made unnecessarily complicated. There should have been no hurdles for operators working for so many years in the market. The industry has been created by us and we are being made unfit now. This way, digitisation can never be done in the given deadlines. Possible Solutions are:
a)All taxes and duties should be subsidised to make STB cheaper.
b)No local taxes should be levied by authorities like entertainment and Service Tax tax till an initial period of 5 years, no VAT on STBs.
c)Content in Phase III and IV should be 50% cheaper in comparison to PHASE I & II as high subscriptions are beyond the affordability of low income households.
d)MHA clearance should be there only for large MSOs who seek FDI.
CQ: Do you think the DTH industry is being benefitted due to slow registration of MSOs? 
Jeevan Khanna: DTH industry is getting benefitted in many ways. Actually digitisation is being forced on consumers by the government only to help DTH operators who are large corporate and supported by Pay Broadcasters because they could not compete with the low subscription rates of analogue networks. 
CQ: What problems do you face in following the government mandate? What are the reasons for low level of ARPUs ?
Jeevan Khanna: High Investment is the main worry for us. It is a known fact that 70% of Indians are poor and they cannot afford costly entertainment. Since they are used to paying such low rates, it is difficult to make them pay more just because the government wants. With no subsidies in taxes and no control of authorities on the rates of Pay Broadcasters, it is even difficult for us to sustain our business. 
CQ: Has the RIO system benefitted Independent MSOs? If not, what are the drawbacks experienced by you.
Jeevan Khanna: RIO rates are very high and it is practically not possible for Independent MSO to do RIO deals and also compete with DTH and National MSOs. National level MSOs are  benefitted by extra discounts on carriage or on their larger subscriber base. Independent MSOs do not get these benefits from broadcasters hence there is no level playing field.  
CQ: Do you face any problem in distributing a-La-carte channels to the subscribers? 
Jeevan Khanna: Yes, due to very high rate of channels we are unable to distribute channels in a-La-carte mode to subscriber. They prefer DTH service when we ask them to pay more. A-la-carte has been designed by the Broadcasters to burden the subscribers so that they are forced to take the bouquets with unwanted channels.
CQ:  What challenges are you facing to enter Phase III & IV areas? Jeevan Khanna: Our biggest problem is that we do not see any return on investment in Phase III & IV. Investment is very high and return is very slow due to inability of consumers to afford raised prices of digital Cable. Also, lack of infrastructure like electricity and fiber connectivity in such areas leads to very low collections and very high expenditure.


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