Broadbandindia Magazine

The Telecom Regulatory Authority of India (Trai) announced a 7% increase for cable services in non-Cas and Cas areas based on whole sale price index movement with effect from New Year’s Day 2009.

Trai issued the Telecommunication (Broadcasting and Cable) Services (Second) Tariff (Ninth Amendment) Order, 2008, and the Telecommunication (Broadcasting and Cable) Services (Third) (Cas Areas) Tariff (Third Amendment) Order, 2008. As per the orders, the ceilings at subscribers end based on the number of pay   channels in different parts of the country have also been revised to reflect this permitted increase.

Even minimal hike will hit hard

For TV services in Cas areas, the ceiling for pay TV has been increased to Rs 5.35 per pay channel per month at the subscriber end (excluding taxes), and the   basic service tier may cost up to Rs. 82 per month to the consumer (excluding taxes) going by the 7% increase. Under the Cas Tariff Order dated 31 August 2006 prevalent now, there is a ceiling of Rs. 5 (excluding taxes) per pay channel per month and Rs. 77 (excluding taxes) per month for basic service tier consisting of minimum 30 free-to-air channels at subscriber level in Cas notified areas.

So if you’re living in a metro city where CAS has not been implemented, your cable bill will go up from Rs 160 to Rs 171 for 20 pay channels and 30 free to air (FTA) channels. If you get more than 20 but up to 30 pay channels, your monthly bill will go up from Rs 200 to Rs 214.

Those in major cities like Agra, Amritsar, Dehradun, Dhanbad, Jamnagar, Nashik and Varanasi will end up paying Rs 150 instead of Rs 140 for 20 pay and 30 FTA channels. For viewers receiving over 30 pay channels, the cost will go up from Rs 170 to Rs 182. Despite a minimal hike in cable charges, the consumer will be hit hard after the taxes kick in.

Reduction in rentals and security deposits

The tariff amendment order for Cas areas also provides for reduction in the security deposit and monthly rental for settop- box (STB) in view of the fall in the   current prices of the STBs over the past two years. The security deposit and rentals of STBs have been revised, and now service providers are required to offer two schemes, one with security deposit of Rs. 200 instead of Rs. 250 with a monthly rental of Rs. 34 instead of Rs. 45, and another with security deposit of Rs. 750 instead of Rs. 999 with a monthly rental of just Rs. 22 instead of Rs. 30. This, it hopes will help popularize digital delivery of TV signals over cable networks. Earlier, the tariff order for cable TV services in Cas areas provided two mandatory schemes to the consumers in which the security deposits and monthly rentals were specified based on the then prevailing prices of the set top boxes. Inflation linked adjustments According to Trai, the orders are aimed at providing inflation linked adjustments in the tariff ceilings for cable TV services in Cas and non-Cas areas. These tariff amendment orders also reflect the market development in set top box prices and accordingly provide reduction in the rentals of standard tariff package for set top boxes for cable TV services in Cas areas. Earlier, the non-Cas tariff order as amended on 4 October 2007 made the cable charges being paid at different levels of the distribution chain as on 1 December 2007 as a ceiling, while making provisions for increases on account of new pay channels. In addition, the existing tariff order also provides for specific ceilings at the subscriber level  based on the number of channels and the city in which a subscriber is getting the cable TV services. Move welcomed by broadcasters The move to revise rates has been welcomed by the broadcast sector. “It is a very good gesture,” says Star Den CEO Gurjeev Singh Kapoor. “We have been waiting for a rate revision for the past two years. We expected a 10% increase but 7% is good.”MSOs, however, don’t expect the set top box rate revisions to spur the spread of digitization. Says DEN CEO Anuj Gandhi: “Any increase is good. But this rate revision benefits broadcasters more. The cable TV market is very competitive and boxes are already available at very competitive  rates. Trai has to work on other issues which are affecting the cable TV sector.” In Calcutta, where only a small part on the city’s southern fringes is under CAS, operators said the revisions would have little impact. “Reducing the security deposit would have little bearing on the industry. In non-CAS areas, set-top boxes are being provided at Rs 300 to Rs 500 (to those who opt for them). The deposit cut is an attempt to draw people into CAS,” said Dilip Singh Mehta, chairman of Cable Comm, a multi-system operator, which sends signals to neighbourhood cable operators. After the revisions, a viewer would pay Rs 12-13 more at the most, Mehta said, suggesting the modest increase was unlikely to affect business. Another MSO official disagreed, saying even a small change in rates could prompt people to switch to direct-to-home players like Tata Sky and DishTV.