Tag: cable TV

Subscribers’ DTH/Cable bills to go down by 14% for a-la-carte channels: ICRA

MUMBAI: The recent Telecom Regulatory Authority of India (TRAI) amendments over tariff charges could potentially lower the direct-to home (DTH)/ cable bills of the subscribers up to 14 per cent from the present levels, a credit rating agency ICRA said in an analytical report.

According to a press statement, ICRA said that the amendment encourage subscribers to exercise their right to choose and opt for a-la-carte channels. TRAI on 1 January 2020 amended some provisions of the Telecommunication (Broadcasting and Cable) Services (Eight) (Addressable Systems) Tariff Order, 2017.

The amendments are slated to come in effect from March 1, 2020.

The Tariff Order released in 2017 had allowed the subscribers to choose the nature of channels as free to air (FTA) or pay channel as well as declare a-la-carte pricing of all channels.

However, contrary to TRAI’s expectations, the rating agency said, given the high channel pricing of the popular general entertainment channels (GECs) and sports channels (with 66 of the 330 existing pay channels being priced at the ceiling rate of Rs. 19 per month).

This move by broadcaster had tarnished the very purpose of the Tariff Order, resulting in up to 23% surge in bills for subscribers, ICRA estimated, and continued the dominance of bouquets in the subscription patterns.

ICRA’s vice president Kinjal Shah said, “The recent amendments will adversely impact the broadcasters, revenues, the subscription revenues are also expected to reduce (as subscription charges for a-la-carte channels will reduce and due to the expected shift of subscribers from bouquets to a-la-carte selection).”

Shah further said, “Furthermore, given the reduction in the number of channels that can be offered in a bouquet (for a given price), bundling of non-popular channels with established ones will reduce, thereby impacting their reach and thus advertisement revenues for the broadcaster. This, however, would eventually lead to an increased focus on content quality.”

TRAI in the amendment of 2017 tariff order has also increased the channel offerings for the network capacity fee (NCF) of Rs. 130 (excluding taxes) per month to 200 standard definitions (SD) (pay or FTA) channels from the present 100 SD channels.

The amendments are expected to be a mixed bag of positives and negatives for DPOs. The overall reduction in NCF and the cap on NCF to be charged for additional TVs in a multi-TV home is negative for the DPOs.

TRAI has, however, allowed DPOs to offer different NCF across geographical regions (state / district / towns) as well as offer promotional schemes (on NCF / Distributor Retail Price – DRPs), up to 90 days at a time, twice in a calendar year. DPOs are additionally allowed to offer discounts on NCF / DRPs for long-term subscription plans.

ICRA’s assistant vice president Sakshi Suneja, said, “After the recent changes in the tariff, the prices of popular GECs and sports channels are expected to reduce from Rs. 19 per month to Rs. 12 per month, given the revised ceiling rates for a-la-carte channels, to be included in bouquets.”

“The amendments also seek to improve the attractiveness of a-la-carte channels, by reducing discounts that can be offered on bouquet pricing to 33% (vis-a-vis a-lacarte prices, from the existing average levels of discounts of 40-54%),” Suneja said.

She pointed out that through the introduction of two new conditions: i) capping the maximum retail price (MRP) of a-la-carte channel that can be included in a bouquet to up to three times of the average MRP per month of a pay channel of that bouquet and ii) MRP, per month, of a pay channel to not exceed the MRP, per month, of the bouquet containing that pay channel.

January 8, 2020
TRAI issues draft regulation to facilitate consumer choice of TV channels using API

MUMBAI: The Telecom Regulatory Authority of India (TRAI) on Friday issued the draft (Second Amendment) to the Telecommunication (Broadcasting and Cable) Services Standards of Quality of Service and Consumer Protection (Addressable Systems) Regulations 2017. Through this draft regulation (second amendment), TRAI is seeking the comments of stakeholders on the issue of developing of app by third parties and consequent sharing of information using Application Program Interface (API) between DPOs and consumers.

The new tariff order rolled out in the beginning of this year put power in consumers’ hand to select television channels they want to watch. To ensure proper implementation of the new framework, the authority has made a number of efforts such as series of meetings with DPOs, publicity in electronic and news media, interactions with customer groups etc. Despite all the efforts, it has been brought to notice of the authority that consumers are not able to make real choice of TV channels.

“It was noticed that quite a few DPO platforms were not providing adequate freedom and choice to consumers. Customers also complained that the call centre of DPOs are also not helping to facilitate consumer choice of the channels,” TRAI said in a release.

To resolve the issues, the authority felt need to have channel selection system developed by third party to facilitate easy channel selection by consumers. As per TRAI, since the third party app will be accessible by every customer of Broadcasting & Cables Services sector, it will facilitate easy choice to consumers.

To facilitate functioning of third-party apps, TRAI created channel selection system API specifications document which prescribed common APIs with all distribution platform operators (DPO). TRAI intends to mandate all the DPOs to compulsorily share information with the apps after authenticating the subscriber so that such apps can help in easy selection of the required TV channels.

The newly issued draft regulation (second amendment) issued shall be open for comments of the stakeholders up to 22 August.

August 10, 2019
Tamil Nadu CM drops minister from cabinet due to cable TV tariff spat

MUMBAI: While Tamil Nadu’s state-run cable operator Arasu Cable revised down its subscription rates recently, the move has led to a political crisis in the state. Chief Minister Edappadi K Palaniswami has dropped former IT minister Dr Manikandan from his cabinet.

After the recent announcement of price revision, Manikandan accused Palaniswami of unilaterally taking the decision of reducing the cable TV monthly subscription as per a report from The Hindu. “I was not consulted. The chief minister announced it. A meeting will happen soon,” Dr Manikandan said. He also alleged that the government declined to fund the government cable network Arasu Cable.

“When we approached the government to bear the cost of STBs, the then finance secretary and present chief secretary K Shanmugam declined to accept. As a result, we repaid ₹400 crore of the total debt (towards providing free STBs) of Rs 619 crore from our (TACTV) revenue. When we were in distress, neither the government nor anyone came to our rescue. If the government comes forward to provide the balance of Rs 219 crore or gives the amount as loan, we can even fix the Arasu Cable tariff at ₹100 a month,” he said.

On July 22, Animal Husbandry minister Udumalai Radhakrishnan was appointed as the chairman of the cable network which did not make Manikandan happy either. He also pointed out the conflict of interest by saying that the latter should first shift two lakh subscribers who are currently under his cable TV network Akshaya Cable to Arasu Cable.

Radhakrishnan recently said that the 11 lakh STBs provided by Arasu Cable which had been switched off, needed to be brought back online as Arasu Cable had now lowered its tariffs.

August 9, 2019

MIB says pending applications for MSO registration under consideration

MUMBAI: The Ministry of Information and Broadcasting (MIB) has informed that the issue of pending applications for MSO registration is under consideration.

MIB informed that that the 50th Open House Meeting for the month of July 2019 was held on 22 July with the representatives of the MSO applicants. Representatives of the five MSO applicants participated in the meeting to ascertain the status of their application for grant of registration.

The list of the applicants present in the meeting:

S.No.	Applicant Name	Cable Network Name
1.	Sh. Shiv Prakash Timmarpur	Mls Hira Cable Network
2.	Sh. Aman Rastogi	M Is Sri Sarvana Cable Vision
3.	Sh. Narender Bagri	M Is ALCOA Digital Pvt. Ltd.
4.	Sh. Diwaker Thareja	President Cable Operator Association
5.	Sh. Ramchander	Mls Shiv Cable Network

July 27, 2019

TRAI recommends no minimum entry net worth for MSO registration

MUMBAI: The Telecom Regulatory Authority of India (TRAI) has recommended that there is no need to fix a minimum entry-level net worth for MSO registration. Moreover, it also added that there is no basis for introducing minimum net worth classification based on the area of operation for MSOs.

TRAI on Monday released its recommendations on "Entry level net-worth requirement of multi system operators (MSOs) in cable TV services". Based on the written submissions of stakeholders and discussions in the open house discussions, recommendations have been framed by the regulatory body.

Other recommendations include:

· As the area-wise minimum net worth classification for registration of MSO is not required, there is no need to prescribe minimum net worth for remote areas of Jammu & Kashmir or North-East region.

· The authority recommends that there is no merit in introducing minimum net worth for registration of MSOs based on network cost criteria.

· The authority recommends that MIB may prescribe a standard proforma for self-declaration of net worth by applicants seeking registration as MSOs.

· The authority recommends that MIB may consider skill development requirement of the sector and take appropriate action so that trained manpower is available to perform specialised tasks.

The regulatory body issued a detailed consultation paper on "Entry Level Net Worth for MSOs in Cable TV Services" on 9 April. Post this, an open house discussion was held in New Delhi in June. The recommendations were finalised after looking at the comments received for the consultation paper and its own analysis.

TRAI also mentioned that with the new regulatory framework in place, small and medium-size MSOs have it better.

Earlier, TRAI also received a reference from Ministry of Information and Broadcasting (MIB) in 2018 seeking recommendations of the former on the appropriate levels for fixation of entry-level net-worth of the multi system operators (MSOs) for operationalising cable TV digitisation across the country.

July 23, 2019
GTPL cable TV business pushes revenue, profits up in Q1 2020

BENGALURU: GTPL Hathway Ltd (GTPL) reported 31.9 percent growth in revenue for the quarter ended 30 June 2019 (Q1-2020, quarter or period under review) and almost three times the operating profit for its cable TV business (CATV business) as compared to the corresponding year ago quarter Q1 2019. The company’s consolidated revenue from operations for the quarter under review grew 50 percent year on year (y-o-y) while consolidated total income expanded 30.3 percent in Q1 2020 as compared to Q1 2019. Consolidated profit after tax more than doubled (grew 164.3 percent) to Rs 33.23 crore in Q1 2020 as compared to Rs 12.57 crore in Q1 2019.

GTPL reported consolidated revenue from operations at Rs 445.47 crore in Q1 2020 as compared to Rs 296.91 crore in Q1 2019. Consolidated total income for the period was Rs 454.30 crore as compared to Rs 296.91 crore in the corresponding year ago quarter. CATV business revenue was Rs 344.16 crore in Q1 2020 as compared to Rs 260.93 crore in Q1 2-19. CATV business reported operating result of Rs 30.49 crore for the period under review as compared to Rs 10.17 crore for Q1 2019.

The company’s internet services business (Ex-EPC Project numbers) revenue grew 9.2 percent to Rs 39.29 crore in Q1 2020 from Rs 35.98 crore in Q1 2019. The segment incurred a small loss of Rs 0.14 crore in Q2 2020 as compared to an operating profit of Rs 2.40 crore in the corresponding year ago quarter. The company had been awarded Package B of the prestigious Bharat Net Phase-II project from the Gujarat Fibre Grid Network Ltd under Digital India Initiative (EPC Project) last year. GTPL reported revenue of Rs 62.02 crore an operating profit of Rs 2.89 crore from the EPC Project.

GTPL reported revenue (Ex EPC Project) of Rs 391.1 crore, which was 29 percent more y-o-y. The company says in an earnings release that its CATV subscription revenue increased 47 percent y-o-y to Rs 247.2 crore. EBITDA Ex EPC Project increased 32 percent y-o-y to Rs 110.3 crore. Ex EPC Project PAT doubled to Rs 26.6 crore.

On the operational front, GTPL says that it has seeded 200,000 STBs and added 300,000 digital paying subscribers in Q1 2020. The company says that it had 97 lakh (9.7 million, 0.97 crore) digital paying subscribers as on 30 June 2019. Phase-wise seeding as on June 30, 2019 for Phase 1, Phase 2, Phase 3 and Phase 4 were at 8.6 lakh (0.86 million, 0.086 crore); 22.6 lakh (2.26 million, 0.226 crore); 30 lakh (3.00 million, 0.3 crore) and 35.8 lakh (3.58 million, 0.358 crore) respectively.

Further, GTPL says that two thirds or 10,000 of the 15,000 new broadband internet subscribers were FTTX subscribers. Consumption per customer at 120 GB/month as on June 2019 was up from 38 GB/month in March 2017, or data consumption increased 3x over two years’ period.

Company speak

Commenting on performance, GTPL managing director Anirudhasinhji Jadeja said, “Q1FY20 was the first full quarter with New Tariff Order (NTO), which has led to significant growth in subscription revenue. Subscription revenue grew by 47percent on a y-o-y basis. Overall, our first quarter performance was in line with our expectation and we see our next three quarters equally exciting. With NTO being stabilised, our focus on taking FTTH to more and more homes, re-launching industry’s first dual service product ‘GTPL GIGAHD’ to convert current customers along with adding new customers and concurrently launching hybrid set top box will help us to converge linear TV viewing with OTT usage. We will further increase the pace of growth momentum towards CATV and broadband business in FY 2019 – 20.”

Let us look at the other numbers reported by GTPL

Consolidated total expenditure increased 42.7 percent during the quarter under review to Rs 403.99 crore from Rs 283.11 crore in Q1 2019. Pay channel cost in Q1 2020 increased 42.5 percent to Rs 180.17 crore from Rs 126.44 crore in the previous year. Other operational costs increased 2.7 percent to Rs 21.39 crore from Rs 20.83 crore.

Employee benefits expense in Q1 2020 was almost flat (decreased 0.1 percent) to Rs 35.29 crore from Rs 35.32 crore in the correspond period of the previous fiscal. Finance costs reduced 20.7 percent during the querter under review to Rs 12.45 crore from Rs 15.70 crore. Other expenses in the period increased 29.8 percent to Rs 48.37 percent to Rs 37.26 crore in the corresponding quarter of the previous year.

July 12, 2019
Arasu Cable plans to launch an OTT service

MUMBAI: Tamil Nadu Arasu Cable TV Corporation (TACTV), the State-owned MSO of Tamil Nadu, is soon jumping on the OTT bandwagon. In addition to it, the MSO will also be providing IPTV services and internet connectivity to rural and urban households. The information was shared by the state minister for Information Technology M Manikandan in the assembly on Wednesday.

He also went on to mention that Arasu aims to get a loan of Rs 100 crore in 2019-2020 with a government guarantee. This loan is to cover up the cash flow deficit that the company is witnessing due to purchasing set top boxes. The investment into STBs led to a depletion of funds and so the company could not meet its financial obligations. There was also expenditure due to broadcasting services.

July 12, 2019
Guest Column: The way forward for DPOs, broadcasters in the new TRAI tariff regime

During the early 2000s, cable television began to spread rapidly across India and the cable distribution business rapidly shifted from the early muddled phase towards a more corporate structure which put emphasis on the rationalisation of business practices, billing system transparency and technical know-how.

The number of cable television subscribers in India grew from 4 lakh in the early nineties to more than 91 million by the end of 2009, the number of satellite television channels grew from a handful in 1992 to around 550 channels in 2010 and there was a significant increase in the number of distribution platform operators. However, the landscape of the cable industry completely transformed when the ordinance to digitise analogue cable systems was passed. The ordinance mandated the digitalisation and it got completed over a period of 6 years from 2011 to 2017 in four phases. Phase I covered the four metro cities of Delhi, Kolkata, Mumbai and Chennai, followed by 38 cities in phase II, all remaining urban areas and rest of India were covered in phase III and phase IV.

The benefits of digitalisation for consumers as compared to analogue are multi-fold including refined quality of transmission, better sound clarity, and the choice to pay for select channels. Post digitalisation, we have witnessed significant consolidation/merger/closure of DPOs in the market with the number of distribution platforms reduced to 1200 from around 6000.

The introduction of the New Tariff Order from 1 Feb 2019 focuses on “Consumer Choices” and will completely change the manner of channel selection, pricing and reach which is likely to disrupt existing revenue models of both broadcasters and DPOs.

New regime and its impact

Prior to the implementation of the new tariff order, the DPOs and the broadcasters were mostly operating on a fixed fee model. However, the new regime is likely to have a significant impact on the channel reach, channel share, ratings of non-driver channels and the overall revenue. The key to address these challenges for securing the correct revenue share amongst other things would entail consumer education, constant monitoring of consumer preferences and realignment of the bouquet packaging strategies taking into account consumer preferences.

Under the new regime, consumers will have the option of paying only for channels they want to watch and can drop other channels from their list and hence, the subscriber base will now solely depend on the communication between the DPOs and the end consumer, and in the event of any communication gap, the last mile consumer will not subscribe to the channels and these may result in significant erosion of subscriber base impacting the revenue of DPOs and the broadcasters.

Also, broadcasters and DPOs will have to upgrade or completely revamp their internal credit risk management and operating systems used for billing, settlements and disputes to capture complex and multiple combinations of channels that a consumer would choose from.

Under the MRP regime, the revenues of MSO & broadcasters will be solely dependent on the subscriber numbers reported by LCO to MSO and IPTV, DTH and MSO to broadcasters. As subscriber reporting requirements have changed from reporting opening & closing of the month to opening & closing for all the weeks of the month, it requires significant system and process upgrades at DPOs’ end. Till such time, revenues of MSOs and Broadcasters remain in jeopardy. It would be imperative to closely monitor the situation from March 2019 onwards when DPOs are expected to submit their first subscriber report.

Way forward

The best solution for broadcasters and the DPOs to earn their fair share of revenues would be to continuously monitor the ground, track channel reach & availability and adapt to changing consumer preferences on a real-time basis. Such requirements can be effectively managed by mapping every DPOs headend catering to each and every last mile consumer, getting complete ground information on packages and channels being offered to consumers through field surveys and regular transport stream (TS) recording cum analysis at consumer points which will help to determine the placement of the channels and their encryption status !

*DPOs include IPTV, DTH, MSO and LCOs.

(The author is managing director in Risk Assurance Practice of PwC, India. The views expressed here are his own and Indiantelevision.com may not subscribe to them)

February 14, 2019
GTPL cable TV business revenue up; broadband business keeps afloat

BENGALURU: Indian multi-system operator and internet service provider GTPL Hathway Ltd (GTPL) reported 12.6 percent increase in total income for the quarter ended 31 December 2018 (Q3 2019, quarter or period under review) as compared to the corresponding year ago quarter (y-o-y) Q3 2018. GTPL’s Total Income in Q3 2019 was Rs 319.91 crore, for the corresponding year ago quarter it was Rs 284.09 crore.

GTPL has two segments – cable TV business and internet service. Every Indian broadband internet services provider has been hit by Jio. Reliance Jio Infocomm has made available low cost broadband internet services at a never before scale in India, unprecedented anywhere in the world. Most operators have been bleeding subscribers, and how! ARPUs have plummeted.

GTPL’s internet service business has been reporting a steep decline in operating profits over the past few quarters. In Q3-2019, GTPL’s internet business was still profitable. And the company has reported that its internet subscriber base increased by 11,000 for the period under review, however at lower ARPU. For Q3 2019, internet business ARPU was Rs 430 as compared to Rs 487 in Q3 2018.

GTPPL’s consolidated profit after tax (PAT) increased 3.1 percent y-o-y in Q3 2019 to Rs 19.72 crore from Rs 19.13 crore in Q3 2018. Consolidated total comprehensive income for the period increased 2.4 percent y-o-y to Rs 19.72 crore from Rs 19.26 crore. Consolidated operating profit (EBITDA) excluding other income was almost flat – it declined 0.8 percent y-o-y in Q3 2019 to Rs 77.89 crore (24.8 percent of operating or op revenue) from Rs 78.53 crore (27.8 percent of op revenue) in the corresponding quarter of the previous fiscal.

Segment Performance

Cable TV business operating result increased 20.1 percent y-o-y to Rs 19.35 crore in Q3 2019 from Rs 816.11 crore in the corresponding quarter of the previous year. Operating revenue of GTPL’s cable TV business increased 14.7 percent y-o-y to Rs 278.06 crore from Rs 242.4 crore.

GTPL’s TV business added 2,00,000 CATV digital subscribers in Q3 2019, 1,70,000 of which it says were paying subscribers. The company says that it had seeded 3,00,000 set-top boxes during the quarter under review. In all GTPL says that it seeded 0.95 crore STBs, of which 0.8 crore were active and 0.745 crore were digital paying subscribers as of 31 December 2018. GTPL’s largest subscriber base is in phase IV areas. Digital paying subscriber bases for phases I, II, III and IV were 0.066 crore, 0.169 crore, 0.226 crore and 0.283 crore respectively. ARPUs remained flat y-o-y across all the four DAS phases. ARPUs net of taxes for phases I, II, III and IV were Rs 103, Rs 102, Rs 67 and Rs 60 respectively.

GTPL’s internet business operating revenue in Q3 2019 was almost flat – it increased 1.1 percent y-o-y to Rs 36.44 crore from Rs 36.03 crore. Internet service segment’s operating results for Q3 2019 declined by 87.9 percent y-o-y to just Rs 0.37 crore from Rs 3.03 crore in the corresponding quarter of the previous year.

GTPL says in a press release that during the quarter, it was appointed as Project Implementation Agency (PIA) of Package B for implementation of BharatNet Phase – II Project in the state of Gujarat by Gujarat Fibre Grid Network Limited (GFGNL). The company says that the project is worth Rs 1,245.77 crore. The project is on EPC bases and includes survey, design, plan, execution with active/passive (OSP + Electronics) components with commissioning of complete network.

Let us look at the other numbers reported by GTPL Hathway

Consolidated total expenditure increased 16.3 percent y-o-y during the quarter under review to Rs 289.05 crore from Rs 248.59 crore in Q3 2018. Pay channel cost in Q3 2019 increased 26.5 percent y-o-y to Rs 137.72 crore from Rs 108.90 crore in the corresponding quarter of the previous year. Other operational costs reduced 16.5 percent y-o-y in Q3 2019 to Rs 23.99 crore from Rs 20.64 crore in Q3 2018.

Employee benefits expense in Q3 2019 increased 18.9 percent y-o-y to Rs 37.63 crore from Rs 31.64 crore in the corresponding quarter of the previous fiscal. Finance costs reduced 20 percent y-o-y during the quarter under review to Rs 5.86 crore from Rs 7.32 crore. Other expenses in the period reduced 3.7 percent y-o-y to Rs 37.28 crore in Q3 2019 from Rs 38.72 crore in the corresponding quarter of the previous year.

Company Speak

GTPL Hathway managing director Anirudhasinhji Jadeja said in a press release, “In an environment of uncertainty, GTPL Hathway has continued to post steady performance. Our first 9 month revenue and PAT are up by 14 percent and 10 percent respectively; reflecting inherent strength of the company’s offerings and quality customer service. The new tariff order has put customers at the centre of the business; providing them freedom to make their own choices. As India’s one of the leading MSOs, we expect higher monetisation across the phases and better transparency as a direct fall out of the new order.”

February 13, 2019
Digitisation has increased M&E revenue: MIB’s Rathore

MUMBAI: The Ministry of Information and Broadcasting (MIB) is patting its back for the digitisation success in India. Minister of State for MIB Rajyavardhan Rathore endorsed the growth of the media and entertainment industry and the benefits of digitisation.

In response to a question raised in the Lok Sabha, he said that digitisation has led to enhanced revenue generation in the industry as it enhanced benefits to consumers as well as transparency in the subscriber base. The government passed the Cable Television Networks (Regulation) Amendment Act in December 2011 for digitisation of cable television networks in a phased manner.

He also added “Digitisation enables efficient utilisation of the spectrum bandwidth and enhances the capacity to carry channels on the cable. The consumers get a wider choice of channels, improved quality of content and added services and the states benefit from lowered incidence of evasion of taxes. Cable TV digitisation has also given a boost to the indigenous manufacturing of set top boxes (STBs) and it also results in skill development & employment generation in digital environment."

Rathore cited the Federation of Indian Chambers of Commerce & Industry (FICCI) report which estimated the growth of the industry at Rs 1660 billion in 2018 from Rs 1473 billion in 2017, while the figure stood at Rs 1026 billion in 2014.

Indian M&E sector has not only seen investments from foreign behemoths only but from large domestic conglomerates. In addition to that, the current digital wave is boosting the growth faster.

January 4, 2019