Category: Local Cable Operators

GST: Both good and bad for the Indian cable TV sector

MUMBAI: India’s most ambitious indirect tax reform, the Goods and Service Tax (GST) got the green flag from the Lok Sabah on 8 August.

While, taxation rates under the GST regime are yet to be finalised, an indicative figure of 18 per cent is being talked of in various circles.

Indiantelevision.com has already postulated that DTH companies like Dish TV could be beneficiaries when GST goes live. Broadcasters, however, could be slapped on their wrists as GST is likely to result in their tax payment going up.

However, cable TV distribution sector is going to benefit like its country cousin – the DTH segment. Estimates are that multisystem operators could end up saving around five to 10 per cent in taxes in many Indian states. However, in some the tax payouts could likely go up courtesy GST.

MSOs operating in states like Punjab (with up to Rs 15000 annual entertainment tax), and Gujarat (Rs 6 per cable TV sub per month), Harayana (no tax), Kerala (Rs 5), Orissa (Rs 3) are going to be impacted negatively with their tax bill climbing up once GST becomes applicable. Other states like Maharashtra (Rs 45 per month subscriber), Jharkhand with Rs 30-50 per month per subscriber, Rs 20 in Delhi, Bihar Rs 15 per month per subscriber, will see a lightening of their tax burden.

Says a cable TV industry observer: “Cable operators normally maintain three sets of books. One for the tax folks, one for the content providers, and one which has the real facts about their business. Many of them are not tax payers at all. Under the new regime, they will have to clean up their acts, get their registration done, get their subscriber information all in order. And then pay their GST. That’s even if their margins keep coming under pressure on account of this.”

Keep watching this space for further updates!

August 9, 2016
Action “reportedly” taken against LCOs in Kurnool and Aurangabad showing Peace TV: Naidu

NEW DELHI: Reiterating that action was taken against telecasting of unpermitted television channels, Information and Broadcasting Minister M Vekaiaih Naidu said today that such complaints were received against some cable operators from some districts such as Kurnool and Aurangabad regarding carriage of Peace TV channel.

He told the Rajya Sabha that the complaints were forwarded to the District Collector for necessary action by the authorized officers under the Cable Television Networks (Regulation) Act 1995 and Rules 1994.

“They have reportedly taken action”, the Minister added in reply to a question.

The Ministry has also invited complaints by the general public regarding transmission of unpermitted satellite TV channels by cable operators on its social media platforms. These are also forwarded to the District Collectors for necessary action.

Whenever instances are brought to the notice of thr Ministry regarding Uplinking of unpermitted TV channels through any Indian teleport, action is taken to stop the same as per the provisions of Uplinking guidelines 2011, he said.

He said that the Cable Act and Cable Rules regulates the transmission and re-transmission of TV channels over the Cable Networks. The Authorized Officers (the District Magistrates, the Additional District Magistrates, the Sub-Divisional Magistrates and the Commissioners of Police within their territorial jurisdiction) under the Act are empowered to take action whenever violations of the Cable Act, 1995 are brought to notice.

The Telecom Regulatory Authority of India (TRAI) has made recommendations on the regulation of ground channels in this regard.

Meanwhile, he said his Ministry had on 8 July 2016 issued advisories to the State Governments and Union Territories, the District Collectors and the MSOs/LCOs that no unpermitted satellite channel such as Peace TV should be carried by the cable operators in the country.

In addition, the Ministry has issued advisories from time to time to the State Governments and Union Territories to constitute State and District Level Monitoring Committees for recommending action against broadcast content being carried by the cable operators which are in violation of the Programme Code and the Advertisement Code under the Cable Act 1995.

The Ministry has mandated Digitization of the entire cable network in the country by December, 2016 in a phased manner through the introduction of the Digital Addressable Systems (DAS). This measure is expected to address the issues of transmission of unpermitted TV channels, he added.

July 29, 2016
Action “reportedly” taken against LCOs in Kurnool and Aurangabad showing Peace TV: Naidu

NEW DELHI: Reiterating that action was taken against telecasting of unpermitted television channels, Information and Broadcasting Minister M Vekaiaih Naidu said today that such complaints were received against some cable operators from some districts such as Kurnool and Aurangabad regarding carriage of Peace TV channel.

He told the Rajya Sabha that the complaints were forwarded to the District Collector for necessary action by the authorized officers under the Cable Television Networks (Regulation) Act 1995 and Rules 1994.

“They have reportedly taken action”, the Minister added in reply to a question.

The Ministry has also invited complaints by the general public regarding transmission of unpermitted satellite TV channels by cable operators on its social media platforms. These are also forwarded to the District Collectors for necessary action.

Whenever instances are brought to the notice of thr Ministry regarding Uplinking of unpermitted TV channels through any Indian teleport, action is taken to stop the same as per the provisions of Uplinking guidelines 2011, he said.

He said that the Cable Act and Cable Rules regulates the transmission and re-transmission of TV channels over the Cable Networks. The Authorized Officers (the District Magistrates, the Additional District Magistrates, the Sub-Divisional Magistrates and the Commissioners of Police within their territorial jurisdiction) under the Act are empowered to take action whenever violations of the Cable Act, 1995 are brought to notice.

The Telecom Regulatory Authority of India (TRAI) has made recommendations on the regulation of ground channels in this regard.

Meanwhile, he said his Ministry had on 8 July 2016 issued advisories to the State Governments and Union Territories, the District Collectors and the MSOs/LCOs that no unpermitted satellite channel such as Peace TV should be carried by the cable operators in the country.

In addition, the Ministry has issued advisories from time to time to the State Governments and Union Territories to constitute State and District Level Monitoring Committees for recommending action against broadcast content being carried by the cable operators which are in violation of the Programme Code and the Advertisement Code under the Cable Act 1995.

The Ministry has mandated Digitization of the entire cable network in the country by December, 2016 in a phased manner through the introduction of the Digital Addressable Systems (DAS). This measure is expected to address the issues of transmission of unpermitted TV channels, he added.

July 29, 2016
Telangana state government sets up committees to track the television sector

MUMBAI: This is one state which is taking the central government’s order to keep a check on the content being aired satellite TV channels following the hue and cry which was raised after the Peace TV controversy. We are referring to the Telangana state government.

Yesterday it constituted the State and District level monitoring committees whose job will be to ensure effective implementation of the Cable Television Network (Regulation) Act.

The committees are expected to meet at least once a year and submit a detailed annual report for Telangan, including district-wise data of cable operators registered within the state and estimated number of TV homes/viewers, to the I&B ministry before 31 December 31 annually. Their job would also be to recommend action and forwarding complaints against satellite television channels that are violating the government’s orders on the programme and advertising codes to the I&B ministry, to ensure that respect, dignity and self-esteem of children and women and other sections of society are duly protected, to see whether the authorised officers are effectively performing their duties, to see how many cases are handled by them and what decisions are arrived at, to give suggestion/ guidance to district/ local level committee, to take decision on the matters referred to it by district/ local level committee, to collect data/ information from district/ local level committee and forward it to I&B secretary.

On the state level committee would be the following: the principal secretaries of revenue and home, secretary and commissioner of I&PR department, Doordarshan Kendra Hyderabad director and commercial taxes commissioner.

The district level committee would have the following members: district collector, superintendent of police, commercial taxes deputy commissioner or his representative and the district public relations officer.

Observers believe that the setting up of the committees is a step in the right direction, but the state would have done well to have other representatives from society and the private sector to give a more holistic perspective.

July 23, 2016
Telangana state government sets up committees to track the television sector

MUMBAI: This is one state which is taking the central government’s order to keep a check on the content being aired satellite TV channels following the hue and cry which was raised after the Peace TV controversy. We are referring to the Telangana state government.

Yesterday it constituted the State and District level monitoring committees whose job will be to ensure effective implementation of the Cable Television Network (Regulation) Act.

The committees are expected to meet at least once a year and submit a detailed annual report for Telangan, including district-wise data of cable operators registered within the state and estimated number of TV homes/viewers, to the I&B ministry before 31 December 31 annually. Their job would also be to recommend action and forwarding complaints against satellite television channels that are violating the government’s orders on the programme and advertising codes to the I&B ministry, to ensure that respect, dignity and self-esteem of children and women and other sections of society are duly protected, to see whether the authorised officers are effectively performing their duties, to see how many cases are handled by them and what decisions are arrived at, to give suggestion/ guidance to district/ local level committee, to take decision on the matters referred to it by district/ local level committee, to collect data/ information from district/ local level committee and forward it to I&B secretary.

On the state level committee would be the following: the principal secretaries of revenue and home, secretary and commissioner of I&PR department, Doordarshan Kendra Hyderabad director and commercial taxes commissioner.

The district level committee would have the following members: district collector, superintendent of police, commercial taxes deputy commissioner or his representative and the district public relations officer.

Observers believe that the setting up of the committees is a step in the right direction, but the state would have done well to have other representatives from society and the private sector to give a more holistic perspective.

July 23, 2016
Unlicensed Pune cable TV operators get warning from entertainment department

Mumbai: Pune city authorities are cracking the whip on errant cable TV operators. According to reports, the Maharashtra state entertainment department has warned cable operators to renew their annual licences with the post office within the next month. Failing this, they would be penalized and face severe action.

The metro has about 1,000 cable TV operators serving about 500,000 subscribers. About 40 per cent of these have not renewed their licences despite being told by the authorities to do so. One of the reasons they have been delaying this, says observers, is their reluctance to pay entertainment tax.

The additional district collector met up with the cable TV operators in Pune and its surrounding areas, following which local officers decided to get tough with them.

Pune falls in the DAS area and cable TV operators have been mandated by government order to deliver cable TV signals to subscribers through a set top box, which would allow them to decide which channels they would like to watch. For this they would have to maintain, CAF forms as well as a list of channels that subscribers are signing up for.

July 20, 2016
Unlicensed Pune cable TV operators get warning from entertainment department

Mumbai: Pune city authorities are cracking the whip on errant cable TV operators. According to reports, the Maharashtra state entertainment department has warned cable operators to renew their annual licences with the post office within the next month. Failing this, they would be penalized and face severe action.

The metro has about 1,000 cable TV operators serving about 500,000 subscribers. About 40 per cent of these have not renewed their licences despite being told by the authorities to do so. One of the reasons they have been delaying this, says observers, is their reluctance to pay entertainment tax.

The additional district collector met up with the cable TV operators in Pune and its surrounding areas, following which local officers decided to get tough with them.

Pune falls in the DAS area and cable TV operators have been mandated by government order to deliver cable TV signals to subscribers through a set top box, which would allow them to decide which channels they would like to watch. For this they would have to maintain, CAF forms as well as a list of channels that subscribers are signing up for.

July 20, 2016
Siticable partners dittoTV; to push OTT to cable TV and broadband subscribers

MUMBAI: It was over the weekend that Zee Digital Convergence’s unleashed a TVC blitzkrieg, promoting its low priced over the top (OTT) service dittoTV. And now it has announced that it is partnering with Essel group cable TV MSO and sister company Siticable.

As part of this, Siticable will be pushing the authentication and subscription to dittoTV from its portal to the subscribers of its cable TV service. Its broadband customers will be able to subscribe to OTT service at no extra cost to them. Siticable and dittoTV will do joint promotions on the ground even as last mile operators will also work on further distributing the OTT platform and servicing those who subscribe to it.

Says dittoTV business head Archana Anand: “We are excited to be partnering with Siticable to give a push to our OTT service. We are looking at maximizing our distribution through the partnership. We launched our TVCs over the weekend and the response has been way beyond our expectations.”

Adds SitiCable CEO V.D. Wadhwa: “The partnership is an exclusive one for Siticable as an MSO. And it is going to be a win win for both of us.”

SitiCable has 12 million subscribers nationally to its cable TV service – an attractive potential captive audience for dittoTV.. Last mile operators who push the OTT service will benefit as a revenue share is being given to them.

The 132,000 Siti Broadband users in Kolkata and Delhi are another lucrative bunch of potential subscribers for dittoTV, especially since it is being bundled with it and being given away free to them. In Delhi, SitiCable delivers broadband using Docsis 3,0 modems to its 30,000 odd subscribers while in Kolkata the number is in excess of 100,000 but the delivery mode is Ethernet on cable. Average revenue per user (ARPU), according to Wadhwa, in Delhi is at Rs 600 while in Kolkata it is Rs 500. While the average bandwidth consumption is 30 GB in Delhi, the figure is half that in the eastern city.

“Broadband users will be able to watch dittoTV’s 100 channels on their laptops, tablets, and smart TVs in the comfort of their homes using our broadband,” says Wadhwa.

That probably should lead to a lift in bandwidth consumption, say observers, and an increase in broadband ARPU for Siticable once customers start using the dittoTV app and streaming the linear 100-odd channels that it is providing.

This apart, SitiCable’s cable TV subscribers, who are using other broadband services – dongles or Chromecast or what have you – will also be able to sign up and stream dittoTV on different devices.

Anand says the two of them will observe how the partnership is panning out in its Delhi pilot before rolling it out into other towns. Overall she has already said ZDCL was looking at 6 million subscribers in FY-2017. Of these, she says about a million should come courtesy its SitiCable partnership.

In all probability, dittoTV is going to serve as Siticable’s offering of an anywhere TV app – a la Tata Sky – as the operator says it is not interested in launching one of its own in the foreseeable future.

As a recap, dittoTV was relaunched last month with an offer of 100 + Hindi, English and regional language channels (excepting Sun TV and Star India) encompassing general entertainment, sports, movies, news and lifestyle following its relaunch last month. It has come in as a low price warrior with its price tag being Rs 20 for a month, Rs 50 for three months, Rs 90 for six months and Rs 170 for a year.

“We are definitely serious about OTT, hence we have priced it so low and are targeting large subscriber volumes,” says Anand. “We are investing in it for the future.”

July 19, 2016
Siticable partners dittoTV; to push OTT to cable TV and broadband subscribers

MUMBAI: It was over the weekend that Zee Digital Convergence’s unleashed a TVC blitzkrieg, promoting its low priced over the top (OTT) service dittoTV. And now it has announced that it is partnering with Essel group cable TV MSO and sister company Siticable.

As part of this, Siticable will be pushing the authentication and subscription to dittoTV from its portal to the subscribers of its cable TV service. Its broadband customers will be able to subscribe to OTT service at no extra cost to them. Siticable and dittoTV will do joint promotions on the ground even as last mile operators will also work on further distributing the OTT platform and servicing those who subscribe to it.

Says dittoTV business head Archana Anand: “We are excited to be partnering with Siticable to give a push to our OTT service. We are looking at maximizing our distribution through the partnership. We launched our TVCs over the weekend and the response has been way beyond our expectations.”

Adds SitiCable CEO V.D. Wadhwa: “The partnership is an exclusive one for Siticable as an MSO. And it is going to be a win win for both of us.”

SitiCable has 12 million subscribers nationally to its cable TV service – an attractive potential captive audience for dittoTV.. Last mile operators who push the OTT service will benefit as a revenue share is being given to them.

The 132,000 Siti Broadband users in Kolkata and Delhi are another lucrative bunch of potential subscribers for dittoTV, especially since it is being bundled with it and being given away free to them. In Delhi, SitiCable delivers broadband using Docsis 3,0 modems to its 30,000 odd subscribers while in Kolkata the number is in excess of 100,000 but the delivery mode is Ethernet on cable. Average revenue per user (ARPU), according to Wadhwa, in Delhi is at Rs 600 while in Kolkata it is Rs 500. While the average bandwidth consumption is 30 GB in Delhi, the figure is half that in the eastern city.

“Broadband users will be able to watch dittoTV’s 100 channels on their laptops, tablets, and smart TVs in the comfort of their homes using our broadband,” says Wadhwa.

That probably should lead to a lift in bandwidth consumption, say observers, and an increase in broadband ARPU for Siticable once customers start using the dittoTV app and streaming the linear 100-odd channels that it is providing.

This apart, SitiCable’s cable TV subscribers, who are using other broadband services – dongles or Chromecast or what have you – will also be able to sign up and stream dittoTV on different devices.

Anand says the two of them will observe how the partnership is panning out in its Delhi pilot before rolling it out into other towns. Overall she has already said ZDCL was looking at 6 million subscribers in FY-2017. Of these, she says about a million should come courtesy its SitiCable partnership.

In all probability, dittoTV is going to serve as Siticable’s offering of an anywhere TV app – a la Tata Sky – as the operator says it is not interested in launching one of its own in the foreseeable future.

As a recap, dittoTV was relaunched last month with an offer of 100 + Hindi, English and regional language channels (excepting Sun TV and Star India) encompassing general entertainment, sports, movies, news and lifestyle following its relaunch last month. It has come in as a low price warrior with its price tag being Rs 20 for a month, Rs 50 for three months, Rs 90 for six months and Rs 170 for a year.

“We are definitely serious about OTT, hence we have priced it so low and are targeting large subscriber volumes,” says Anand. “We are investing in it for the future.”

July 19, 2016
Q3-2016: Ortel Communications’ YoY revenue up 22%

BENGALURU: The Bibhu Prasad Rath led regional cable television and broadband internet player Ortel Communications Limited (Ortel) reported YoY revenue (Total Income from Operations or TIO) of 21.8 per cent at Rs 48.03 crore in the current quarter (quarter ended 31 December, 2015, Q3-15) as compared to Rs 39.44 crore and 4.9 per cent QoQ growth as compared to Rs 45.79 crore.

The company reported PAT in Q3-2016 at Rs 3.89 crore (8.1 per cent margin) as compared to a loss of Rs 0.1 crore in Q3-2015 and 37.5 per cent higher QoQ PAT as compared to Rs 2.83 crore (6.2 per cent margin).

Ortel provides services in the Indian states of Odisha, Chhattisgarh, Andhra Pradesh, Madhya Pradesh and West Bengal.

Notes: 100,00,000 = 100 lakh = 10 million = 1 crore

The numbers mentioned in this report are standalone.

The company’s cable segment reported 17.3 per cent YoY growth in revenue at Rs 31.99 crore in the current quarter as compared to Rs 27.27 crore and 3.4 per cent QoQ growth as compared to Rs 30.93 crore. This segment reported 46.6 per cent YoY growth in operating profit of Rs 13.61 crore in Q3-2016 as compared to Rs 9.28 crore and 4.1 per cent QoQ growth as compared to Rs 13.08 crore.

Ortel’s broadband segment reported 16.3 per cent higher revenue at Rs 8.28 crore as compared to Rs 7.12 crore in the corresponding year ago quarter and 1.7 per cent more than the Rs 8.14 crore in Q2-2016. The broadband segment reported an operating profit of Rs 4.78 crore in the current quarter as compared to Rs 4.52 crore in Q3-2015 and 9.1 per cent higher than the Rs 438 crore in Q2-2016.

Ortel president and CEO Rath said, “I am delighted to share that our key strategy of LCO buyout is receiving huge response in our markets. Healthy addition to RGUs has led to strong growth of 38 per cent in bottom-line on a Q-o-Q basis. Given the strong pipeline of RGUs yet to be integrated, we are confident of improving upon this solid performance in the coming quarters.”

“Broadband business continues to do well and remains a key focus area for us. We are working towards delivering notable growth in subscriber base, which would further augment our performance and overall profitability,” he added.

“FY2016 will be one-of-the-best-years in the history of Ortel Communications backed by record RGU additions and solid visibility for LCO buyouts in the coming year. With more than 90 per cent subscribers on ‘last mile,’ we remain committed to this model and strongly believe it will create tremendous value for all stakeholders going forward,” Rath said.

Ortel’s YoY revenue generating units (RGU) grew 19 per cent to 626,475 as compared to 526,551 and increased 9.6 per cent QoQ as compared to 571,834 in Q2-2016.

Cable TV RGUs increased 19.3 per cent YoY in Q3-2016 to 558,766 as compared to 468,274 and increased 10 per cent as compared to 508,171 in Q2-2016.

Ortel’s YoY primary digital cable RGUs grew 33.9 per cent to 127,098 in Q3-2016 as compared to 94,926 and grew 8.3 per cent QoQ to 117,401. The company says that its Cable TV penetration stood at 23.7 per cent and penetration in the current quarter.

Broadband customers in the current quarter grew 16.2 per cent YoY to 67,709 as compared to 58,277 and grew 6.4 per cent QoQ as compared to 63,663.

Ortel reported a slight drop in digital and analogue cable ARPUs in the current quarter. Digital cable ARPU in Q3-2016 was Rs 181; in Q3-2015 it was Rs 186 and Q2-2016 it was Rs 183. Analogue cable ARPU in Q3-2016 was Rs 141, in Q3-2015 it was Rs 147 and in Q2-2016 it was Rs 143. Broadband ARPU in Q3-2016 was higher at Rs 396, while in Q3-2015 it was Rs 394 and in Q2-2016 it was Rs 395.

Cable Subscription, Connection and Channel carriage fees

The company’s cable subscription fees in Q3-2016 increased 6.5 per cent to Rs 21.2 crore as compared to Rs 19.9 crore and was 3.2 per cent more than the Rs 20.6 crore in Q2-2016. Connection fees increased 32.7 per cent to Rs 1 crore as compared to Rs 0.70 crore and increased 33.8 per cent as compared to Rs 0.7. Channel carriage fees in the current quarter increased 48.3 per cent to Rs 9.8 crore as compared to Rs 6.6 crore in Q3-2015 and increased 1.4 per cent as compared to Rs 9.7 crore in Q2-2016.

Let us look at the other numbers reported by Ortel:

Total Expenditure in Q3-2016 increased 16.2 per cent YoY Rs 39.78 crore (82.8 per cent of TIO) as compared to Rs 34.24 crore (86.8 per cent of TIO) and was 2.8 per cent more than Rs 38.72 crore (84.6 per cent of TIO) in Q2-2016.

The company’s programming cost in the current quarter increased 9.7 per cent to Rs 9.1 crore as compared to Rs 8.3 crore in Q3-2015, but declined 3.3 per cent as compared to Rs 9.44 crore in Q2-2016.

Bandwidth cost in Q3-2016 increased 25.4 per cent to Rs 2.1 crore as compared to Rs 1.7 crore and increased 9.1 per cent as compared to Rs 1.92 in Q2-2016.

Employee Benefits Expense in the current quarter increased 31.6 per cent to Rs 5.7 crore as compared to Rs 4.3 crore in Q3-2015 and increased 0.6 per cent as compared to Rs 5.64 crore e in Q2-2016.

Lower interest costs

SREI Equipment Finance Limited, the largest lender of the company, extended a prompt payment rebate (PPR) of one per cent on the company’s borrowings with effect from 1 October, 2015. This is in addition to the earlier rebate of 0.75 per cent, which would bring down the effective interest rate to 14.25 per cent.

January 27, 2016