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Tag: CAS

  • HTMT consolidates media subsidiaries, spins off IT/ITES biz

    HTMT consolidates media subsidiaries, spins off IT/ITES biz

    MUMBAI: Hinduja TMT Limited (HTMT) is unifying its media subsidiaries under one umbrella while spinning off its IT/ITES business into a separate entity. The demerger exercise is to bring independent focus to the two lines of activities, a senior company executive said.

    The residual HTMT (without IT/ITES) will house the media business and have a cash of $125 million. This will be used for new business initiatives, acquisitions and funding the expansion of the media and entertainment business.

    As part of the restructuring, In2Cable (subsidiary which is into broadband business) and InNetwork Entertainment (content) are being merged into IndusInd Media & Communications Ltd (cable TV distribution under Incablenet brand).

    “The parent company for the consolidated media business will be HTMT (an existing listed entity),” said HTMT global chief financial officer Yagnesh Sanghrajka. HTMT will have 60.5 per cent equity of the merged media and entertainment entity while Intel and Kudelski will hold 5 per cent.

    The demerged IT/ITES company, HTMT Technologies Ltd, is expected to list in February-March 2007. It will have a cash of $140 million. The funds will be used for acquisition opportunities overseas, particularly the US, as the company plans to add to its geographical reach and domain competencies.

    The IT/ITES business has a strong presence in Healthcare, Telecom, Consumer Electronics and BFSI segment. It is present in 5 different countries and has a successful track record in acquiring and integrating overseas ITES-BPO companies in the past two years. It is now looking for more such acquisitions in the USA-UK-Latin American markets to consolidate its position and expand inorganically as a leading global player in this industry.

    “Both the entities will have enough cash to pursue their independent expansion plans. The money is from the proceeds of the Hutchison Essar stake sale which fetched $450 million. Out of this, $150 million is for debt repayment while payout towards dividend will be around Rs 1.3 billion. The balance will remain with these two entities,” Sanghrajka said.

    Post restructuring, a shareholder of HTMT holding two equity shares of Rs 10 each would receive one equity share of Rs 10 in HTMT Technologies and one equity share of Rs 10 in HTMT.

    “The restructuring of the media business is from April. The demerger would be recorded from 1 October,” Sanghrajka said.

    The merger of media and entertainment is being done to converge video, voice and data services under one entity as a triple play provider. The merger will bring in operational efficiencies, provide sharper focus on the core business of media & entertainment, telecom and content distribution and ensure smooth implementation of conditional access system (CAS) across Indian cities, packaged with value added services, he added.

    The demerger of the IT/ITES business as well as the restructuring of the media and entertainment entities is subject to requisite statutory approvals and sanction of the Mumbai High Court.

    HTMT also announced a special dividend of Rs 20 per share on shares of Rs 10 each to the shareholders out of the proceeds of the Hutchison Essar sale.

  • Broadcasters look set to move court against pay channel price ceiling in CAS

    Broadcasters look set to move court against pay channel price ceiling in CAS

    MUMBAI / NEW DELHI: The broadcasters knew it was coming, but that in no way lessened their outrage over the CAS pricing broadside delivered by the sector regulator today. The next course of action will in all likelihood be to move the courts.

    In a move clearly aimed at “honouring” the pledge given by the government “that television viewers will have to pay less under a CAS regime”, the Telecom Regulatory Authority of India (Trai) today decreed a Rs 5 ceiling on pay channels.

    The broadcast regulator has fixed the price of free-to-air (FTA) channels in the basic tier at RS 77 (exclusive of taxes). The regulator, which oversees the broadcast and telecom sectors, has fixed the costing for pay channels whether new or existing at RS 5 making it mandatory to offer all pay channels on a la carte basis.

    RC Venkateish, ESPN India MD, did not mince his words while stating, “The pricing of pay channels by Trai are totally arbitrary and damaging for all industry stakeholders, including the consumer who might get low grade programming as investments in sports programming, like in entertainment, is high.

    “How can you expect broadcasters to put in money for procuring high-quality programming when the rates realised from the market will go down so much. It will have a dramatic effect on content quality.

    “Broadcasters are bound to seek legal opinion and take legal recourse.”

    That is obviously not how Trai chairman Nripendra Misra sees it. Misra said the prices that Trai had determined were very much in line with market forces. Additionally, Misra was quite categorical that this was “the final order on this subject.”

    In an interview to business channel CNBC TV18, Misra justified the regulator’s diktat by stating: “If you see the features of this policy announcement, the first thing to be appreciated is that there is only a maximum retail price; it does not fix the individual channel price. The second thing is that it does not fix the bouquet price. It also has not fixed the discounts for the bouquets. So everything has been left to the market forces except the maximum retail price ceiling, which has been determined by us.

    “To provide some stability to the revenues of the broadcasters, it has also been provided that the MRPs will apply only where the subscription is for a minimum period of four months.”

    Not surprisingly, the cable service providers are in tune with Misra on the matter. Says K Jayaraman, CEO of the multi-systems operator Hathway Cable and Datacom (in which Star India has a 26 per cent stake), “CAS is the best deal for consumers and the unwanted channels will go. As the fundamental thing in CAS is choice, that gets protected in this pricing structure,”

    That line of argument cut no ice with Arun Poddar, CEO, Zee Turner who said, “The rationale behind the pricing stumps us. If the regulator wants channels to come cheap, then the channels too would be forced to lessen expenditure on programming.

    “I don’t rule out broadcasters taking the regulator to court over the pricing issue.”

    The Indian Broadcasting Foundation, which represents the interests of broadcasters, is meanwhile scheduled to meet on Saturday to thrash out what legal recourse will be taken, as also to evolve a common strategy, senior channel executives tell Indiantelevision.com.

    The mood among cable operators was in stark contrast to that among the broadcasters. Cable Operators Federation of India president Roop Sharma, went so far as to say that Trai should have gone even lower on its pricing. “I think the prices of pay channels should have been even less at RS 3. It would have been better for the consumer then. Like in Pakistan, where each pay channel is priced at Re 1 or RS 2.

    “I feel it’s a win-win situation for everybody, including the broadcasters, who had accused cable operators of under-declaration.”

    “The comparison (with Pakistan) is ridiculous,” an incensed channel executive said. “The whole business model of broadcasting in Pakistan is based on piracy,” he pointed out.

    Commenting on the FTA channels’ pricing, Vikky Chowdhry, president of another cable operator faction NCTA, said, “The price of basic tier of free to air channels should be revisited. Still, at RS 77 (exclusive of taxes), 30 channels are manageable.

    Sameer Manchanda, joint MD, GBN, put the whole scenario in proper perspective when he said, “The prices looks low for sports and entertainment channels as programming investment is higher in these genres. The rationale of the regulator seems incomprehensible. At least some genres of channels could have been separated from the others.”

    Media stocks plunge on Trai’s pricing issue

    The market voted with its feet today on the news of the Trai’s price ceiling ruling with all media stocks sliding southwards. Media stocks showed a steeper fall than the the benchmark Sensex Index, which lost 24.87 points (0.21%), to settle at 11,699.05.

    According to a leading investment banker, “The directive issued by Trai will prove detrimental to broadcasters’ revenue kitty, especially for general and English entertainment channels and sports broadcasters.”

    Media scrips that fell today include Zee Telefilms, Sun TV, NDTV, TV18, TV Today and Sahara One Media and Entertainment.

    Zee Telefilms opened at RS 290 and closed the day at RS 265, down 8.6 per cent. Chennai based broadcaster Sun TV opened at RS 1,224 and ended at RS 1,199.
    NDTV opened at RS 200 and closed at RS 195, while TV18 opened at RS 647.15 and closed the day at RS 599. TV Today opened at RS 77 and closed at RS 76. Sahara One Media and Entertainment opened at RS 346 and closed at RS 339.

  • CAS: Govt populism may force low prices

    CAS: Govt populism may force low prices

    NEW DELHI: Popular pay TV channels at prices below Rs. 10 (Rs. 47=1US$) each for Indian cable TV subscribers?

    Might be hard to believe, but may become a reality if the Indian broadcast regulator succumbs to pressures from the government to keep cable TV prices at present level in a CAS-enabled regime.

    According to information available, Telecom Regulatory Authority of India (Trai) is likely to announce later today prices of pay channels that may look ridiculously low.

    Sources in the regulatory body indicated that there’s immense pressure from the government (read the information and broadcasting ministry) to keep cable TV subscription at affordable levels when addressability is rolled out from 1 January 2007.

    Presently, an Indian household shells out between Rs. 150 to Rs. 400 on an average per month for cable TV channels ranging between 30 to 100 depending on the locality of residence.

    The present mantra is simple: posh-er the area, higher the subscription fee.

    It is leant that the I&B ministry is in favour of pricing popular pay channels (Star Plus, Zee TV, Sony, HBO, Star Movies, ESPN and Star Sports, for example) at prices that would be affordable and keep the average monthly outflow to around Rs. 170 (exclusive of free to air channels).

    If this formula is taken into account, then most popular TV channels — most of which are pay — have to be priced around Rs. 5 or below Rs. 10 to cater to the varied taste.

    Out of the 265 TV channels that the government recognizes — 65 have applied for landing rights and the rest uplink from India — approximately 70 are pay channels.

    As per a court mandate, agreed upon by the government and industry stakeholders, CAS is to be implemented in the south zones of Kolkata, Delhi and Mumbai from midnight of 31 December 2006.

    Sector regulator, buffeted between demands from the government and the industry, has to announce prices of pay and free-to-air channels (basic tier in an addressable regime) by the evening of 31 August to adhere to a Delhi court-mandated sequencing of CAS rollout.

    It needs to be seen whether Trai will give a go-ahead to the prices submitted by various pay channels (most bouquets have given wholesale prices) or decides to go in for a maximum retail price (MRP) in case it finds them unreasonable.

    According to a report put out by the Press Trust of India (PTI) on 10 August, I&B minister Priya Ranjan Dasmunsi informed Rajya Sabha (Upper House) that television viewers will have to pay less under a CAS regime.

    There would be no charges on free-to air channels, the minister had said, adding the viewers would pay according to pay channels they opt for instead of paying a fixed tariff varying from Rs. 150 to Rs. 300 per month currently.

  • Trai poised to finish CAS-related work; price fixing of pay & FTA channels next on the agenda

    Trai poised to finish CAS-related work; price fixing of pay & FTA channels next on the agenda

    NEW DELHI: Telecom Regulatory Authority of India (Trai) is close to fixing prices of pay and free to air (FTA) channels, which will complete part of the formalities for rollout of addressability from 1 January 2007.

    According to sources in the regulatory body, which oversees the broadcast and telecom sectors, over the next few days more directives are likely to come on pricing of channels in a conditional access system (CAS) regime.

    The sources said that most major bouquets and TV channels have submitted a formula for pricing of channels for a regime when pay channels will have to go through a set top box on a mandatory basis.

    “Networks like Star and bouquets like Zee Turner and (Discovery-Sony) One Alliance are there with prices of individual channels,” a Trai source said when asked whether a la carte prices of TV channels have been submitted to the regulator or not.

    CAS is scheduled to be rolled out in the south zones of Kolkata, Delhi and Mumbai from midnight of 31 December 2006, as per a Delhi court-mandated understanding that the government has reached with the broadcast industry.

    Trai sources said that over the weekend the regulator is first likely to fix the price of free to air channels, which will form the basic tier in a CAS regime, and then follow it up with pricing of pay channels.

    Trai had asked various pay TV channels to submit a la carte prices instead of bouquet pricing, which was being pushed vigorously initially by a section of broadcasters.

    The regulator had also clarified that if the pricing of a pay TV channel in a bouquet seems unreasonable or on the higher side compared to other siblings, it will then fix a price, which will be valid for a year.

    What is not clear at the moment is whether Trai will okay individual prices of pay TV channels in a bouquet or go in for genre-wise pricing like bunching all movie channels across the spectrum, for example, and then fixing their individual prices.

    It is also expected that the price of FTA channels in the basic tier is
    likely to be more than what was fixed three years back at Rs. 72 (exclusive of taxes).

    This time round, cable operators have petitioned to Trai that the basic tier should be priced around Rs. 150 keeping in view the general inflation and increase in other sundry costs like usage of electricity poles in various cities. These charges are given to local power companies as cable ops use electricity poles to string their own cable.

    According to the sources in the regulatory body, the whole CAS-related work will have to be finished before month-end.

    Over the past few days Trai has come out with directives on quality of service for cable operators and multi-system operators and revenue share formula amongst various industry stakeholders.

  • Trai fixes revenue share for stakeholders; carriage fee to stay with MSOs

    Trai fixes revenue share for stakeholders; carriage fee to stay with MSOs

    NEW DELHI: The Indian broadcast regulator has finally legitimised carriage fee or the payment TV channels make to be on tunable bandwidths and cable networks. The Telecom Regulatory Authority of India (Trai) has also set the revenue sharing model for industry stakeholders.

    Trai said today that from the revenue generated from pay channels, broadcasters will keep 45 per cent, multi system operators (MSOs) 30 per cent cable operators 25 per cent.

    Additionally, carriage fee is to be retained fully by MSOs, while the basic tier services fee will be retained fully by local cable operators.
    MSOs, according to Trai, can operate throughout a CAS area without any restriction on area of operation.

    The objective of having standard interconnection agreements is to ensure that implementation of CAS does not get delayed in case service providers fail to enter into mutually acceptable interconnection agreements through negotiation within the stipulated time.

    In a statement, the regulator said that apart from providing standard interconnection agreements, those dated 10.12.2004 have also been amended to prohibit such clauses in interconnection agreements that would require a distributor of TV channels using an addressable system to pay a minimum guaranteed amount as subscription fee.

    Some of the highlights of the standard interconnection agreements are as follows:

    # The service providers are at a liberty to enter into mutually acceptable interconnection agreements which are different from the standard interconnection agreements

    # If any of the service providers in the CAS areas are not able to arrive at a mutually acceptable interconnection agreement within a time-period specified by the Authority, then they shall be required to enter into interconnection agreements as per the standard interconnection agreements

    # The standard interconnection agreements between broadcasters and multi system operators have been provided only for pay channels.

    # Term of standard interconnection agreements to be 12 months.

    # All service providers in CAS areas who do not have pre-existing interconnection agreements as on the date of issue of this Regulation and who are not able to arrive at a mutually acceptable agreement shall enter into interconnection agreements as per standard agreements within 10 days of the receipt of permission by MSOs from the government.

    # All the service providers in CAS areas who have a pre-existing interconnection agreement appropriate for operating in a CAS area as on the date of issue of this regulation, but are unable to arrive at a mutually acceptable agreement within 30 days of the expiry of the pre-existing interconnection agreement, shall enter into standard interconnection agreements within 30 days of the expiry of the pre-existing interconnection agreement.

    Other details of the regulator’s latest directives on interconnect are available on www.trai.gov.in.

  • Trai issues regulations on quality of cable TV service

    Trai issues regulations on quality of cable TV service

    NEW DELHI: Cable TV consumers are in for a pleasant surprise as cable operators will now be put under stringent monitoring relating to quality of service.

    India’s broadcast regulator today issued detailed regulations prescribing standards of quality of service to be observed by the cable operators and multi system operators in CAS notified areas of Mumbai, Kolkata, Delhi and Chennai.

    The Telecom Regulatory Authority of India (Trai) said the regulations would come into effect from 1 October, 2006.

    The regulations have been drawn keeping in view the facts that the industry would be subject to prescription of quality of service standards for the first time and, therefore, would need time to adjust on various quality of service aspects.

    The issues addressed in the regulations broadly cover the following areas:

    (i) Connection, disconnection, transfer and shifting of cable services
    (ii) Complaint handling and redressal in respect of cable services
    (iii) Billing Procedure and billing related complaints
    (iv) Set-top box related issues and complaints
    (v) Positioning of channels / taking the channel off air

    A snapshot of the major features of these regulations categorized under the above-mentioned broad areas are indicated below:

    Application for connection/disconnection/transfer/shifting
    * Application for pay channel or request for basic service tier to be responded within five working days.
    * Cable Service connection/reconnection to be provided within 2 working days on completion of all formalities by the subscribers.
    Complaint handling and redressal
    *Multi System Operator/Cable Operator to maintain customer service center/help desk center for 24 hours, 7 days a week including facility for automatic recording of complaints.
    *All complaints received in the day to be attended/responded within eight hours.

    Billing related issues
    * Billing to be done normally on monthly basis and entries to be itemized.
    *Subscribers required to ensure prompt payment of bills. Deterrents to discourage delayed payments
    *Redressal of complaints on billing within 7 days from the date of notice.

    Set Top Box (STB) related issues
    * MSO/Cable Operator to repair or replace within 24 hours of receipt of complaint of malfunctioning of set top box and refund of security deposit within seven days of return of set top box.

    *Rebate for delay in activation/reactivation of set top box beyond two working days @ Rs 15 per day for the first 5 days and @ Rs 10 per day for the subsequent period

    Positioning of channels/Taking the channel off air
    *No channel to be taken off the air, except for circumstances beyond the control of the operator, without prior notice of three weeks.

    The High Court of Delhi on 20 July 2006 had directed implementation of CAS in the three metros of Mumbai, Kolkata and Delhi by 31 December 2006.

    One of the areas identified in the implementation of CAS was prescription of quality of service standards by Trai, which has been now done after consultations with the industry stakeholders.

    A full text of the regulation along with the explanatory memorandum is available on Trai’s website, www.trai.gov.in.

  • Trai meets broadcasters on CAS, firm on channel MRPs

    Trai meets broadcasters on CAS, firm on channel MRPs

    NEW DELHI: Broadcast regulator Telecom Regulatory Authority of India (Trai) Thursday held discussions with industry stakeholders, but was firm that a la carte pricing of channels is inevitability.

    Still, the regulator seemed sympathetic to a revenue share formula in favour of MSOs and broadcasters over and above a certain price.

    Thursday’s meeting that Trai held with some broadcasters was more of a formality as the regulator made it clear to broadcasters present that maximum retail price (MRP) of TV channels under CAS regime is coming whether some like it or not.

    According to information available with Indiantelevision.com, most participants were against a la carte pricing of channels and pitched for wholesale prices, which would give the cable operators a chance to fix some margins for themselves.

    However, Trai was categorical that as per a government mandate MRP of a TV channel under a CAS regime has to be decided and would be finalised by 31 August 2006; industry feedback notwithstanding.

    Those who attended Thursday’s meeting included representatives from Star India, Sony Discovery One Alliance, Global Broadcast Network, Zee Network and Indian Broadcasting Foundation.

    Trai has been mandated by the government to fix the norms, including pricing of individual channels, under a CAS regime, which is slated to be rolled out in the south zones of Delhi, Kolkata and Mumbai from 1 January 2007.

    The government on 31 July issued a notification setting 31 December, 2006 as the deadline for the three metros of Delhi, Mumbai and Kolkata to be fully “CAS delivered” as a Delhi court had desired.

  • Cable, DTH locked in ad war

    Cable, DTH locked in ad war

    MUMBAI: The ad war between direct-to-home (DTH) service providers and cable TV operators has started. Soon after Dish TV ran a full page campaign on print asking viewers to stop watching cable TV, operators have retaliated with the tagline “Cable TV – Service at your doorstep.”

    The most obvious attack is on pricing. Dish TV, the ad says, offers all channels without the Star bouquet at Rs 300 per month. After adding up the 10 per cent licence fee and taxes (entertainment and service), the monthly bill in Mumbai will work out to Rs 412. Then there is the hardware and rental cost for the set-top boxes (STBs) which have to be paid in advance. Besides, there are no discounts for multi-TV homes, the ad states.

    Cable prices in the conditional access system (CAS) areas, on the other hand, will begin from Rs 77 per month for the free-to-air (FTA) channels. The pricing for the pay channels is yet to be decided as broadcasters have to fix the rates. As for the set-top boxes, the early bird offer is Rs 2000. “With judicial intervention and government regulation now being brought in place, you too will reap benefits of CAS once it takes off from 1 January,” the ad says.

    Regarding service, cable TV has run even on days of calamities. Most of the consumer complaints are pricing related issues which are linked to pay channel hikes. “Cable networks also provide internet service. How come you never faced price related issues when dealing with the same cable network,” the ad states.

    The cable TV industry is “geared to usher in a new digital cable revolution with over 140 channels, radio services, games and on screen electronic programme guides.”

    The cablewallah may have finally woken up to the competition from alternate digital distribution platforms. The battle, as they say, is just beginning.

  • Trai proposes tariff rate on STBs

    Trai proposes tariff rate on STBs

    MUMBAI: The Telecom Regulatory Authority of India (Trai) has proposed that cable TV service providers in conditional access system (CAS) areas to offer digital set-top boxes (STBs) on a monthly rental scheme of Rs 30 and a refundable security deposit of Rs 999.

    Subscribers will also have the other option to take the permanent rental scheme with no security deposit. But the monthly rent in this case would be higher. They also have the choice of subscribing to analogue boxes.

    Under the first scheme, the regulator has said that subscribers would own the box after five years and no monthly rentals would have to be paid after that.

    In case of a period before five years, the multi system operator (MSO) or cable operator shall be entitled to make deductions from the refundable security deposit at the rate of Rs 12.50 for every month or part of the month for which the subscriber has used a STB taken on rent or lease. The deductions will be made upon the submission of the STB in working condition.

    Under the standard tariff package (STP), subscribers will have the second option of not paying any security deposit but the monthly rental will be higher at Rs 45 per STB. For analogue boxes, the rent will be Rs 23 per month per STB.

    “In both options, there will be no payment for installation, activation charges, smart card/viewing card, repair and maintenance cost. Stakeholders are also free to suggest any other option as a STP,” Trai said today in a release.

    “Since the Indian standards do permit analogue STBs, an option for these boxes has also been provided under the second category,” the regulator added.

    Trai’s draft of the tariff proposals for STBs has invited comments of the stakeholders. Stakeholders may comment on these alternatives as well as suggest any other options for Trai to consider.

    “It has been proposed that each service provider should at least offer one STP in addition to any other alternate tariff package. The rationale behind this proposal is that every consumer should have the choice of choosing from amongst various alternatives of which at least one should be a package that is approved by Trai,” today’s release said.

    Trai’s proposed draft tariff order for STB schemes in CAS areas follows the government’s notification on 31 July that CAS would be implemented in Delhi, Mumbai and Kolkata. Earlier, the division bench of the Delhi High Court had passed an order directing implementation of CAS with effect from 31 December in these three metros.

  • Trai answers questions about CAS

    MUMBAI: In pursuance of the Directions of the Hon’ble Delhi High Court on implementation of CAS, the three metros of Delhi, Mumbai, Kolkata by 31 December 2006 and Chennai (where it is already in implementation), Trai has taken a number of initiatives. As part of the process of implementation and to facilitate enhanced consumer awareness, Trai has placed on its website a compilation containing Frequently Asked Questions (FAQs) on CAS and related Orders and Regulations of TRAI.

    These are meant to educate the subscribers and the general public in the four metros about CAS. The attempt is to provide answers in a language which a layman can understand, the compilation covers questions, answers to which are necessary to clear doubts and provide greater clarity. The detailed FAQs are available on Trai’s website www.Trai.gov.in.

    The FAQs begin with background information about Cable TV operations. Thereafter there are specific questions related to the following items:-

    – Conditional Access System/Addressable System, CAS Area, Non CAS areas etc.
    – Set Top Box, Smart Card, STB Tariff package etc.
    – Free to air channel, pay channel, basic service tier tariff.
    – Benchmarks and timelines for quality of service.

    It is hoped that these answers to Frequently Asked Questions would help consumer organizations and consumers to ensure that the benefits intended to be provided to them by the various orders of the Authority are fully availed off.