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Tag: LCO

  • Steps taken to allow level-playing field in FDI for all MSOs and LCOs, rules tightened on ownership

    Steps taken to allow level-playing field in FDI for all MSOs and LCOs, rules tightened on ownership

    MUMBAI: In a major step to create a level-playing field, cable operators or multi-system operators who are not undertaking upgradation of networks towards digitalization and addressability will also be entitled to 100 per cent foreign direct investment.

     

    However as in other cases where it has increased the FDI to 100 per cent, entry beyond 49 per cent will be through the government route.

     

    There is also a change in the policy with regard to uplinking and downlinking of channels. The investment will be 49 per cent through the government route with regard to uplink of news and current affairs channels but uplinking of non-news and current affairs channels (GECs) will be 100 per cent through the automatic route. Downlinking of TV channels is also 100 per cent through the automatic route.

     

    The investment for terrestrial FM radio continues to be 49 per cent through the automatic route, subject to such terms and conditions specified from time to time by the Information and Broadcasting Ministry for grant of permission for setting up of FM Radio stations.

     

    These changes have come after a re-assessment of the relaxations allowed in fifteen sectors including broadcasting on 10 November.

     

    It was also clarified that in the I and sector where the sectoral cap is up to 49%, the company would need to be’owned and controlled’ by resident Indian citizens and Indian companies, which are owned and controlled by resident Indian citizens.

     

    The Department of Industrial Policy and Promotion of the Commerce Ministry said for this purpose, the equity held bythe largest Indian shareholder would have to be at least 51% of the total equity, excluding the equity held by Public Sector Banks and Public Financial Institutions, as defined in Section 4A of the Companies Act 1956 or Section 2 (72) of the Companies Act 2013, as the case may be.

     

    The term ‘largest Indian shareholder’ will include any or a combination of individual shareholders, or a relative of the shareholder within the meaning of Section 2 (77) of Companies Act 2013; and a company/group of companies in which the individual shareholder/HUF to which he belongs has management and controlling interest; in the case of an Indian company, a group of Indian companies under the same management and ownership control.

     

    For the purpose of this Clause, “Indian company” will be a company which must have a resident Indian or a relativeas defined under Section 2 (77) of Companies Act 2013/ HUF, either singly or in combination holding at least 51%of the shares.

     

    This is subject to the provision that in case of a combination of all or any of the entities will have entered into alegally binding agreement to act as a single unit in managing the matters of the applicant company.

  • Will foreigners buy into easing of FDI in cable TV, DTH?

    Will foreigners buy into easing of FDI in cable TV, DTH?

    MUMBAI: The government has earlier this week announced the lifting of Foreign Direct Investment (FDI) barriers for 15 sectors as a Diwali bonus to industry.

     

    Hereon, the limit for uplinking of news and current affairs for television channels has been increased from 26 per cent to 49 per cent. Foreign majors wanting to look at a long term play in the broadcast distribution space can now pump in 100 per cent in cable TV networks (multi-system operators and local cable operators), DTH, teleport, headend-in-the-sky (HITS) and mobile TV ventures as against the 74 per cent earlier Distribution platforms can raise as much as 49 per cent FDI through the automatic route. If companies want to go beyond that, they will need government approval. The radio sector has got some welcome breathing space in that investment limits have been hoicked to 49 per cent from 26 per cent earlier.

     

    What does this all mean for the television ecosystem? Will there be a flood of money flowing into cable TV, DTH, teleport, HITS and mobile TV ventures from overseas? Will news channels attract foreign investment by the sackful?

     

    We, at indiantelevision.com, believe that none of this likely to happen in a hurry in all the segments that have been prised open.

     

    Distribution is a tough play in India as history has shown. It is relatively unorganized, with low ARPUs, it lacks transparency, is small in scale, and is short on capital, which makes it an unappealing asset to invest in. Digitisation of cable TV has led to some improvement, but it is still a halfway house. The lack of last mile customer ownership, paucity of subscriber information, lack of two way addressability, and business norms and ethics make it a relatively high risk investment.

     

    Things may change if Reliance Jio makes inroads into cable TV and brings some order into it. However, its management may well discover that distribution is like a slippery soap in a shower, that  it is more complicated than distributing electricity or exploring and drilling for oil.
     

     

    It is the MSOs’ broadband businesses that are a lot more transparent,  that have in any case been spun off into separate companies keeping in mind government regulations and restrictions.  And this is what may catch the interest of investors.

     
    In the nineties, Rupert Murdoch partnered with Subhash Chandra in Siticable – only to exit a little later with his knuckles bruised. A few years later he once again took a shot at it when Star India invested in the Rajan Raheja promoted Hathway Cable & Datacom. Once again, he had to exit yelping in pain. Since then, Star has been extremely averse to investing in cable TV.

     Most of the major distribution ventures are listed: Siticable, Hathway Cable & Datacom, Ortel, Hinduja, Den Cable, SunTV, DishTV, Airtel, Reliance Big (the management is currently getting it delisted),  and some even have attracted private equity investments. But the stock market has not really bought into pure play distribution initiatives and the shares have been depressed as compared to the prices they could command. The PEs which have parked funds in them are still waiting for a nice fat return on their investments.

     Where FDI has worked is in the DTH space and the sole exception is DTH operator Tata Sky in which Twenty First Century Corp holds a 30 per cent stake.  Then there is Videocon d2h, which is listed on Nasdaq, following to the support of its lead investment partner Harry Sloan of Silver Eagle. The Essel group owned Dish TV has got the thumbs up from the market and has got a buy recommendation from many research firms.

     
     
    DTH operators, unlike their cousins on the ground, are more organized, professional, have transparency of operations and have recently started getting some payback from their upfront and cumulative investments over the past decade or so building scale in their customer base.

     
    Hence, it is quite possible that Dish TV, Airtel, Videocon, and Tata Sky might see some activity following the loosening of FDI.  But even prior to the announcement, not many investor suitors had lined up looking to partner with them.

    At the time of writing this report, the stock markets had reacted positively to the news about the easing of FDI in media, and had pushed up the share prices of Dish, Siticable, DEN Networks by 10 per cent plus before Diwali.

     Sun TV, has so far been happy being a lone player with a stranglehold on its markets, and has desisted from partnerships with local players. One does not know if promoters Kalanithi and Kaveri Maran will change their thinking now.

     As far as news is concerned, major news organisations worldwide have enough on their hands. They are grappling with the changing paradigm of news gathering and dissemination, courtesy the explosion in social media and their live streaming apps which threaten to make individuals  – whether journalists or online stars – with huge followings, a rival to large news networks. For the new millennials, online is the preferred source of news, which they consume on their twitter or facebook timelines.

     India has a surfeit of news channels or ‘views channels’; many of them are run for purposes of influence, and not as commercial initiatives. For the relatively more professional ones, the key question is whether foreign investors – especially those in the news business would be happy with a less- than majority equity position in a news television channel. For that to appear attractive they will look for dividends or a northward movement in the stock price.
     

     
    News organizations normally are obsessive about keeping control over the content on a news channel. But you there have had been licensing deals – like in the case of CNN-IBN.  Others have come in on their own, after getting downlinking and uplinking clearances.

     

    It’s not as if news television in India is a very scalable business opportunity.  At least, so far. The largest news network does revenues of around Rs 500 crore.  This could go up to Rs 1000 crore with the expansion in regional news and distribution internationally. The limited scalability despite, amongst the news players some of whom look alluring figure: NDTV, Times Now, Zee Media, TV9, TV Today, ITV group, and  India TV. Of course some smaller players like BAG Films E24 group might attract FDI.

     

     What should come as a relief is the allowing of 100 per cent FDI through the automatic route in non-news and current affairs channels. Many new channels and broadcast networks which are looking  to expand their global footprint to include the Indian audience may now do so, either through mass and/or niche channels. Full ownership means they can control their destinies in India.
     
    Now that the government has opened its house on FDI in media, it would do well by making the procedures simpler and faster. TV broadcast players managements have to perforce get ministry of home affairs, ministry of information and broadcasting’s  and RBI’s clearances. The  bureaucrats,  directors and officers in these bodies need to be trained to reflect the Modi government’s approach in being industry enabling, rather than being obstructionist. Maybe a single window clearance approach could help. Otherwise, even this FDI liberalization may end up being another well-intended-but-misplaced initiative.

     

  • Siti Cable revs up DAS phase III preps

    Siti Cable revs up DAS phase III preps

    MUMBAI: SITI Cable, Zee Network enterprise’s cable expertise SITI Cable is greatly committed to the government initiative of mandatory digitization. Digitization of phase 1 & 2 towns is over and 31st  Dec 2015 is deadline for phase 3 towns.

     

    As part of its commitment to drive the digitization process, SITI Cable is constantly engaging with LCO partners across multiple states in the country and is providing all possible support to them.

     

    SITI provides its digital cable TV signal over IP based platform which is robust & scalable and ensures continuity of signals. The industry first subscriber management system, Own Your Customer (OYC) specially designed for LCO gives full control of subscribers to LCO.

     

    A SITI LCO can also choose STB from the multiple options like MPEG 2 / MPEG 4 / HD / PVR. The state of art digital Headend by SITI provides more than 300 SD & HD channels. The technology is future ready and will provide value added services like recording facility, video on demand, games etc.

     

    In select cities, SITI Cable’s digital network is broadband ready which provides revenue enhancement opportunities to its business partners. The company follows consistent business policy for all its business associates and LCOs can rest be assured of uniformity in the content price. SITI is a professionally managed organization and so the partnering LCO have access to best people, technology and support.

     

    Today SITI Cable as part of this initiative has shared it vision of digitization with the LCO

    partners in the town of Riwari & Bhiwari

     

    Speaking about the digitization in phase III & IV areas SITI Cable CEO V.D Wadhwa said, “We at SITI Cable are committed to ensure that customers have an access to quality services. The mandatory digitization is underway and this initiative will ensure a larger participation in the process by all.”

  • Interconnect agreements mandatory for provision of signals: TRAI

    Interconnect agreements mandatory for provision of signals: TRAI

    NEW DELHI: Following several cases in this regard before the Telecom Disputes Settlement & Appellate Tribunal (TDSAT), the Telecom Regulatory Authority of India (TRAI) today proposed that no signals can be provided to multi system operators (MSOs) or cable operators after the expiry of the Interconnect Agreement.

     

    The draft Telecommunication (Broadcasting and Cable Services) Interconnection (Digital Addressable Cable Television Systems) (Sixth Amendment) Regulations 2015 says that: “It shall also be mandatory for the broadcaster to enter into written interconnection agreement with the multi system operator for retransmission of the pay channel(s) even if nil subscription fee is charged by the broadcaster or paid by the cable operator.”

     

    All stakeholders have been asked to respond with their comments by 20 November with counter-comments by 27 November.

     

    The draft says that it will be mandatory for the service providers to enter into new agreements 21 days prior to the date of expiry of the existing agreement “to ensure that inconvenience is not caused to the consumers by sudden disconnections of signals due to failure of the service providers to enter into new interconnection agreements.”

     

    Furthermore, broadcasters or MSOs, as the case may be, will give notice to the MSO or the linked local cable operator (LCO), as the case may be, to enter into the new agreement 60 days prior to the date of expiry of the existing interconnection agreement.

     

    In case the service providers fail to enter into new interconnection agreement, the MSO or the linked LCO, will have to inform the consumer the disconnection of signals 15 days prior to the date of expiry of the agreement.

     

    TRAI said it had been observed from the Interconnection details submitted by the service providers that signals of TV channels are being provided by several broadcasters to MSOs and MSOs to LCOs even in the absence of interconnection agreement in writing.

     

    This continuation of retransmission of signal without valid interconnection agreement on the pretext of continued mutual negotiations often results into disputes and sometimes abrupt disconnection, which affects the quality of service to the consumers.

     

    Another area of concern brought to the notice of the Authority was regarding the effective date of applicability of new agreements: that is, whether the new agreement shall apply from the date of entering into the new agreement or it shall apply from the date of expiry of earlier agreement. It not only results in complaints but also disputes between service providers.

     

    Therefore, TRAI has reviewed the present regulations, which provide scope for mutual negotiations even after expiry of the agreement has been reviewed so that no signal can be provided after expiry of the interconnection agreement between the service providers.

  • Reliance Jio Media on track for Phase 1 of cable TV rollout between Jan – Mar 2016

    Reliance Jio Media on track for Phase 1 of cable TV rollout between Jan – Mar 2016

    MUMBAI: Reliance Jio Media, which acquired a pan-India multi system operator (MSO) licence from the Ministry of Information & Broadcasting (MIB) in June this year, is on track for the roll out of its cable television business across digital addressable system (DAS) in Phase 3 areas.

     

    Calling a recent report published as “misleading,” which stated that the company is going to  focus more on 4G and broadband,  as compared to digital television and distribution, a senior Reliance Jio official tells Indiantelevision.com, “MSO business is an integral part of our services and we are as focussed on it as we were from the very beginning.”

     

    Reliance Jio Media has already shortlisted the cities for the first round of MSO rollout. “We will start with 15 cities initially and eventually will reach out to more than 100 cities over the next three years. The first round of launch will take place anytime between January to March 2016,” the official informs.

     

    The MSO will offer both standard definiion (SD) and high definition (HD – incluing Ultra HD)  services to garner high average revenue per user (ARPU). “We will follow a model, which is sustainable in the long run. Having all the viewing experiences for consumers is an important factor and we won’t compromise with that,” added the official.

     

    “Headends, technological partnerships and other infrastructure deals have already been sealed with a few vendors and we will have everything sorted out before 31 December. We are in conversation with several LCOs for both broadband and cable partnerships. Post Diwali we will have the final round of discussion with LCOs for digital cable business,” said the official.

     

    Reliance Jio CEO K Jayaraman leads the company’s MSO business.

     

    A source from the industry opined, “The team that they’ve got in place has the muscle power to deal with any situation. I don’t think there is any lacklustre attitude towards the MSO business from the conglomerate.”

     

    Another senior official from a technological giant, on condition of anonymity said, “We have been working closely with Reliance Jio creating different products for them. We are actively pursuing our partnerships and have no information of a slow down or postponement of launch of distribution of cable TV.”

  • MIB asks stakeholders for details of DAS public awareness campaigns

    MIB asks stakeholders for details of DAS public awareness campaigns

    NEW DELHI: All broadcasters, multi system operators (MSOs) and cable operators have been asked by the Ministry of Information and Broadcasting (MIB) to send details of the public awareness campaign being carried out by them about the third phase of digital addressable system (DAS) and the need for having a set top box (STB) in every television home.

     

    The stakeholders have been asked by MIB Joint Secretary (Broadcasting) R Jaya to send this information within 15 days along with documentary proof.

     

    Stressing that every TV home has to have an STB, she said it was essential that MSOs and cable operators carry only digital encrypted signals after 31 December this year.

     

    At the outset, she said that since the cut-off date was very near, it was presumed that broadcasters, MSOs and LCOs had already done their bit.

     

    Under Section 44 of the Cable Television Networks (Regulation) Act 1995 and the Rules framed there-under, the centre had notified phased implementation of DAS in the country by the cable operators.

     

    Phases I and ll of cable digitisation had been completed and Phase lll of digitisation, which will cover all the remaining urban areas in the country was scheduled for completion by 31 December this year, while rural areas would be covered in phase lV to be completed by 31 December, 2016.

     

    Jaya said that the public must be aware that they require a STB before the cutoff date and drew attention to the provision under Rule 12 of the Rules, which states, “Every Broadcaster, MSO and LCO shall create public awareness among, and provide information to, the subscribers in the notified areas from a period at least thirty days prior to the date such areas are notified either through advertisements in the print and electronic media or through such other means including leaflets, printing on the reverse of website, the receipts, personal visits, group meetings with subscribers or consumer groups. This should contain the salient features of DAS.”

  • TRAI devices simplified online form to gain info on LCOs & linked MSOs

    TRAI devices simplified online form to gain info on LCOs & linked MSOs

    NEW DELHI: With the deadline for Phase III of digital addressable system (DAS) virtually at the doorstep, the Telecom Regulatory Authority of India (TRAI) has created a Google form to gain first-hand information about every local cable operator (LCO) in the country.  

     

    According to information available with Indiantelevision.com there are more than 60,000 LCOs in the country and no authority at present has the complete information about each of them. 

     

    According to TRAI, the aim was part of its function to regulate the telecom and broadcasting services; lay-down the standards of quality of service to be provided by service providers and ensure level playing field amongst the service providers and nurture the condition for the growth of the sector.

    The regulator said it had been taking up several activities to protect the interest of cable operators, address their grievances and educate them about their rights and obligations. 

     

    However it required data to keep the LCOs updated about the policies and regulation made by TRAI, data related to the LCOs such as name, address, e-mail, mobile number and city of operation etc.

     

    The online information gathering mechanism through a single Google form will help the regulator get all the information about the LCOs, which will be stored by TRAI in its database.

     

    The form, which is easy to fill, has only sought the full contact details of the LCO, whether he gets his signals from the broadcaster or multi system operators, and the names of the MSOs he is attached to.

     

    The link to the form is 

    https://docs.google.com/forms/d/1dWCwSlNEkcAqFbQhep9T7OmOhfHZSNN5UMFGr2a1wyc/viewform?usp=send_form or http://goo.gl/forms/q34NG1AHHf

  • TDSAT directs Tejpur MSO to not stop signals if LCOs make payments

    TDSAT directs Tejpur MSO to not stop signals if LCOs make payments

    NEW DELHI: Tejpur Cable Networks has been directed by the Telecom Disputes Settlement and Arbitration Tribunal (TDSAT) not to disconnect the signals of Mahabhairab Cable Network and over 20 other petitioners provided they make payments as directed by the Tribunal.

     

    The local cable operators (LCOs) were also told that they could not move on to another multi system operator (MSO) without the permission of the Tribunal.

     

    The LCOs were permitted to file the supplementary petition bringing on record certain relevant facts, which though canvassed before the Tribunal, did not form part of the original petition. The supplementary petition may be filed within a week.

     

    Listing the case for 16 November, TDSAT chairman Aftab Alam and members Kuldip Singh and B B Srivastava said the MSO could file replies to the present petition as also the supplementary petition, if any, within two weeks from the date of receipt of a copy of the supplementary petition.

     

    By way of an interim arrangement, the Tribunal directed Arup Borah to pay to the MSO a sum of Rs. 2.5 lakh. The payment may be made in two instalments. The first instalment amount of Rs 1.5 lakh should be paid by 20 October and the balance Rs 1 lakh by 10 November.

     

    Similarly, petitioners 14, 17, 19, 24 and 25 should pay to the MSO sums of Rs 6100, Rs 3270, Rs 15,000, Rs 1480 and Rs 18,326 respectively by 30 October.

     

    In addition, petitioners no 3 to 25 were directed to pay one-third of the amounts shown as outstanding against them up to September in the chart handed over by MSO counsel Sharath Sampath to the Tribunal. The payment of the one-third due amounts should be made by 10 November.

     

    From October onwards, each of the petitioners shall pay the monthly subscription fees at the rate at which they were paying the monthly subscription in December 2013, before the reduction of 15 per cent of the amount.

     

    All the payments as directed above will be on account basis and will be subject to the rights and liabilities of the parties as may be determined finally.

     

    The Tribunal said it was of the view that there is an urgent need of reconciliation of accounts between the two sides “and the proper reconciliation is likely to resolve the disputes to a very large extent. However, the parties are in so much dispute that reconciliation of account may not be carried out properly by the two sides on their own and it should, therefore, be supervised by a Charted Accountant. “We, accordingly, direct both sides to appear before Mr. Rohit Vasvani, one of the mediators before the Mediation Centre of the Tribunal,” it said.

     

    The parties were directed to appear before him with complete books of accounts and other relevant materials on 28 October. Vasvani has been requested to take up this matter on an urgent basis and to complete the reconciliation within the shortest possible time. He may ask the parties to appear before him in his office. 

     

    Vasvani will be paid honourarium of Rs 50,000 and this amount shall be shared in the following manner:

    Respondent no. 1 – Rs 20,000

    Respondent no. 2 – Rs 20,000

    Petitioner – Rs. 10,000 

  • TDSAT asks Karnataka LCO body to reconcile disputes with Siti Cable

    TDSAT asks Karnataka LCO body to reconcile disputes with Siti Cable

    NEW DELHI: The Karnataka State Digital Cable TV Operators Welfare Association has been asked to visit the Bangalore offices of Siti Cable Networks to reconcile their accounts and resolve their disputes about quality of set top boxes (STBs).

     

    The Telecom Disputes Settlement and Arbitration Tribunal (TDSAT) had asked the parties in August to take their issues before a mediation centre by 30 September. It was informed today that the parties were meeting and discussing the matter bilaterally.

     

    TDSAT chairman Aftab Alam and members Kuldip Singh and B B Srivastava listed the matter for future hearing on 9 October.

     

    It had also directed the parties in the last hearing that status quo would be maintained till this exercise is completed.

     

    Furthermore, the Tribunal said any one of the two parties were free to mention the matter before the Tribunal in case it is not satisfied with the mediation.

     

    The Karnataka Association claims to represent 269 cable operators and its counsel Nittin Bhatia claimed that the STBs were of very poor quality and was badly affecting the viewing quality of the signals supplied by Siti Cable.

     

    He said that all the cable operators who are part of the petition were willing and prepared to make payment of the monthly subscription fees at the rate of Rs 60 per month. He also stated that the cable operators are willing to have a reconciliation of accounts and if any dues are found against them at the rate of Rs 60 per month, they would clear all the dues without delay. 

     

    Bhatia said all the cable operators who are represented in the petition were willing to introduce package-based transmission as directed by the Telecom Regulatory Authority of India (TRAI), as in that case the cable operators would also be entitled to certain benefits.

     

    Siti Cabe counsel Upender Thakur said there was a dispute as to the number of cable operators involved. He also said large sums are due against the cable operators and  in any event Siti Cable is bound to follow the TRAI’s direction to introduce package-based transmission of channels. 

     

    The Tribunal said the parties should first try to resolve their disputes through mediation. It asked the mediator to try to conclude the matter expeditiously.  

  • TDSAT directs Siti Cable & subsidiaries to unblock signals to 141 Kolkata LCOs

    TDSAT directs Siti Cable & subsidiaries to unblock signals to 141 Kolkata LCOs

    NEW DELHI: Siti Cable and four multi system operators (MSOs) associated with it have been directed by the Telecom Disputes Settlement and Arbitration Tribunal (TDSAT) to unblock the IDs and remove on-screen displays (OSDs), if any are running on the network of any of Kolkata’S 141 cable operators.

     

    The Tribunal also asked the Cable Operators Sangram Association of Kolkata representing the LCOs, Siti Cable, and the four MSOs namely Indian Cable Net Company, Calcutta Communication, Purvi Communication and Purbalaya Communication to maintain status quo both in regard to payment of monthly subscription fees as also supply of signals to the individual LCOs until further orders. 

     

    TDSAT chairman Justice Aftab Alam and members Kuldip Singh and B B Srivastava also accepted the plea of the Association to implead the four MSOs in the petition as some LCOs received their Siti Cable signals through these.

     

    Listing the matter for 15 October, the Tribunal noted that the companies “are evidently subsidiaries of the sole respondent, namely Siti Cable Network, but in view of the objection raised on its behalf, it is necessary to bring them on record by having them formally impleaded as party respondents.”