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Tag: MSO

  • DTH could push HD penetration in next one year: MPA

    DTH could push HD penetration in next one year: MPA

    MUMBAI: As the year comes to an end, the multi system operators (MSOs) have finally come out with their packages and the pricing module for the Star India channels, after the broadcaster decided to give its channels only on Reference Interconnect Offer (RIO) basis.

     

    But according to Media Partners Asia (MPA) while Star has the right intent, it has to remain flexible on the incentives offered for better ground adoption. From the operator’s viewpoint, the Star scheme needs to address the following issues:

     

    1. Despite availing of the maximum discount on the scheme, the content cost for operators remains higher than previous CPS deals, exacerbated as operators are not receiving any carriage fees.

     

    2. The scheme does not factor in volume discounts on the basis of an absolute number of subscribers offered through a given operator network.

     

    3. Channel pricing is based on filed RIO rates. These are not reflective of consumer preferences. For instance, Star Plus which enjoys 2x the viewership of Life OK, has a lower price than Life OK.

     

    4. To generate higher discounts, the scheme demands carrying maximum channels with 90 per cent penetration. This will result in a rich basic pack offering which will disincentivise future upselling to an operator’s high value packages.

     

    5. Even if operators are able to pass through content costs to subscribers, MSOs face the risk of paying more and collecting less as the current backend systems for operators are not robust and transparent enough to collect and pass on revenues for channels on an a-la carte basis.

     

    6. The scheme does not factor in HD channels. MSO action plan and execution risk Star has been transparent on rates and discounts for its channels. Some national MSOs have accordingly started to work on their blueprint of tiering channels through a broad revenue share arrangement with local cable operators (LCOs). On the backend, according to MPA, the operators now critically need to have their technology systems in sync with consumer preferences, collected through KYC (Know Your Customer) forms. They will also need to decentralise control by extending their consumer databases to respective LCOs to enable the upgrading and downgrading of packages as per consumer choice. As backend systems get re-engineered, MSOs will need to concurrently conduct roadshows and training programmes for LCOs. MSOs will also need to undertake marketing campaigns to create awareness on a consumer’s need to make choices on revised cable packages.

     

    MPA also feels that MSOs intend to pass their increase in net content cost to consumers by undertaking an average price hike of Rs 40-60 ($0.7-1) per month. Even if consumers accept the price increase, the risk to MSOs lies in collecting their legitimate share of incremental revenues from LCOs. In order to offset this, MSOs plan to shift to trade prepaid services, which should have positive consequences.

     

    Long term implications for the Pay TV industry

     

    Broadcasters: Currently, all broadcasters are looking to reduce carriage fees and bring it to parity with DTH in terms of total payout. A number of broadcast networks are taking a wait-and-see approach. Having already eliminated carriage in DAS markets, if Star manages to obtain reasonable viewership for its driver channels with a nominal growth in subscription revenues, MPA believes that others too will broadly follow Star’s approach.

     

    According to MPA, non-carriage discounted rate schemes could become the template for future content deals. This will have direct implications on several advertisement-skewed and reach-dependent genres, such as news and music. Channels in such genres might then remain feasible by converting to free-to-air. Launching new channels will become difficult and as a result, the industry could see rebranding and a frequent change in the programming mix of existing channels.

     

    MSOs: As carriage and placement revenues start to dry up, the priority for MSOs for the next 12 months will be to shift to establishing robust back-end systems for better subscription monetisation in phases I and II. Consequently, voluntary digitisation and reach expansion in phases III and IV could take a back seat. MPA in its report also points out that national MSOs have already invested and outsourced backend systems to renowned IT vendors, which need to now streamline the secondary point network in order to attain authenticated customer information and deliver strong customer support services.

     

    “Critical is the increasingly important need to successfully rollout trade prepaid services and rationalising content cost by identifying active paying subscribers which will address the current cash flow crisis and determine the future feasibility of an MSOs business model.

     

    As the industry shifts gears, we may see more consolidation of cable players which fail to invest and execute on establishing B2C processes,” says MPA.

     

    DTH: Over the last 30 months, the DTH industry had implemented a 53 per cent increase in its base pack pricing. Just when it seemed that rate hikes on base packs had hit a ceiling, the price hikes implemented by MSOs provided the DTH industry with additional headroom to undertake further price increases. In addition, with tiering of channels on cable, the value gap in the form of realisation per channel between cable and DTH operators will narrow, feels MPA.

     

    As per MPA, a lighter base pack for both cable and DTH will gradually result in the upselling of subscribers to high value packs, thereby boosting ARPU growth.

     

    Moreover, Star’s entertainment and sports channels have been key drivers for HD in India.

     

    MPA in its concluding remarks points out that acquiring Star’s HD channels on RIO makes it unfeasible for cable and thus enables DTH operators to push HD penetration aggressively for the next one year. Through attractive pricing and marketing, DTH operators could leverage HD to win some subscribers from cable.

  • RIO to affect Star’s sports and niche channel distribution: MPA

    RIO to affect Star’s sports and niche channel distribution: MPA

    MUMBAI: Star India’s new distribution approach has been the talking point for the industry. And now highlighting the same is Media Partners Asia (MPA) in its new report.

    Post the announcement of Reference Interconnect Offer (RIO) deals by Star, most multi system operators (MSOs)in order to keep both content cost and churn under check, opted to carry Star’s key Hindi channels on the base pack, along with free-to-air channels and lower RIO rate channels such as Nat Geo. In certain markets, 1-2 relevant regional channels have been bundled in the base pack.

    Not only this, many of the niche channels (English cluster) have been moved to higher or expanded basic tiers or available on a-la-carte basis.

    “This will adversely impact channel reach and viewership. However, the revenue losses on these channels will be partially compensated by reduction in carriage fee costs,” says MPA in its report.

    MPA, however sees a bigger risk, potentially to Star’s sports channels, as sizeable investments have already been made to creating non-cricket sports leagues leveraging Indian soccer and badminton.

    “These leagues are still in their infancy and require maximum distribution reach,” points out MPA.

    It further goes on to say that in cricket too, Star will broadcast the ICC World Cup in February 2015. However, according to MPA, with all India matches, semis and finals also available to viewers on public broadcaster Doordarshan, Star may have to rethink its incentive schemes in order to maximise its distribution of sports channels.  

    MPA estimates that the commercial rollout of package could take at least two to three months (completing in the early half of Q1 2015) and in the meantime, the delay will put pressure on the distribution of Star’s niche channels.

    “New channel launches for Star could also become equally challenging as it loses the luxury of having 100 per cent sampling on the cable platform,” it reports.

    In conclusion, Star’s new distribution strategy, will be a true acid test of consumer demand for its portfolio of channels. Viewership trends over the coming weeks will reflect such demand.

    “On a positive note, the outcome will help Star to prioritise and rationalise its content budgets, which have swelled across multiple genres, in recent years,” opines MPA.

  • CVNO Alert: Kolkata LMOs sign MoU with Meghbela

    CVNO Alert: Kolkata LMOs sign MoU with Meghbela

    KOLKATA: The Cable Virtual Network Operator (CVNO) in Kolkata is moving fast in order to meet its 15 December launch deadline. In the latest, more than 200 Kolkata based last mile owners (LMOs) have signed a Memorandum of Understanding (MoU) with city-based multi-system operator (MSO) Meghbela Cable & Broadband Services.

     

    The MoU, which will see Meghbela provide the infrastructure to the LMOs will be valid for 36 months.  

     

    “Yes, the MoU is signed and now based on this, we can initiate our work.  Around 205 LMOs have come together so far,” confirmed Cable Operators Sangram Committee general secretary Apurba Bhattacharya to indiantelevision.com.

     

    “Our brand name will be Meghbela, since the MSO is a DAS license holder. The watermarked logo of the MSO will also be displayed on the TV screen,” he further added.

     

    The nature of agreement is based on the Telecom Regulatory Authority of India’s (TRAI) regulations as well as on the demand and requirements of both the parties.

     

    The CVNO model, according to the LMOs will operate in all areas of Kolkata. “The MSO will levy a minimum price against every set top box (STB),” informed a LMO, who is part of the business model. 

     

    Talking on the cable TV tariff, Bhattacharya said, “While the package rates will be the same but the LMOs will have the freedom to allow discounts from their pocket to subscribers.”

     

    Meghbela Cable has already installed around 1.26 lakh STBs in Kolkata DAS I areas. While in places which fall under DAS III and IV like Haldia, Bankura, Arambagh and Hooghly, the MSO offers 9-10 lakh cable TV connections, majority of which is analogue.

     

    The CVNO model is set to empower LMOs to give their subscribers the choice of channels according to affordability.

  • Kolkata LMOs CVNO project likely to rollout from 15 December

    Kolkata LMOs CVNO project likely to rollout from 15 December

    KOLKATA: The year seems to be ending on a good note for the Kolkata based last mile owners (LMOs), who post digitisation, have been wondering if they would still have ownership of their customers. The LMOs can now breathe a sigh of relief as the cable virtual network operator (CVNO) is taking shape and should be up and running by 15 December 2014.

    As reported earlier by Indiantelevision.com, the LMOs apart from uniting to set up their own control room and headend have also tied-up with existing DAS license holders. This apart, in order to speed up the launch, the LMOs are now also talking to the Set Top Box (STB) and headend suppliers and other vendors in India and abroad.

    The LMOs have already signed an agreement with a DAS license holder, who will levy a minimum price against every STB. If sources are to be believed, more than 150 LMOs have signed and given consent with an entry fee.

    Not revealing much on the operation model Cable Operators Sangram Committee general secretary Apurba Bhattacharya says, “It would be affordable to subscribers.”

    Tying up with existing license holders ensures LMOs the power of billing subscribers, distribution of package according to the choice of viewers, share of carriage fee and ownership of STBs, further explains Bhattacharya.

    There are some DAS license holders who might go ahead and increase their topline and bottomline by strengthening their presence in the market.

    When asked if the LMOs are setting up the headends, other LMOs, who are part of this initiative inform, “The concept is very clear, to either set up our own headend or to partner with MSOs. The investment for every LMO will be according to how much they can afford. In fact some financiers are also ready to invest.”

    He further explains that the investment would be based on the size of the LMO’s network and requirement of STBs.

    LMOs are the founder of this business. “It can be assured that the quality as well as performance will be competitive with the existing MSOs,” he points out.

     

  • TRAI asks if LCOs, MSOs be permitted to share infrastructure with VNOs

    TRAI asks if LCOs, MSOs be permitted to share infrastructure with VNOs

    NEW DELHI: The Telecom Regulatory Authority of India (TRAI) wants to know if there is any need to introduce more competition in service delivery by the way of introduction of Virtual Network Operators (VNO) and whether this will pose any threat to Network Service Operators (NSO).
     
    In a Consultation Paper on “Delinking of  the license for networks from delivery  of services by way  of Virtual Network Operators,” TRAI has also asked how Mergers & Acquisitions should be dealt with in the VNO/NSO licensing model and should the recently announced M&A guidelines issued by the Government for existing players be extended to cover VNOs.

    It has asked the stakeholders to send in their responses by 5 January and counter-comments by 12 January. The Department of Telecommunications had on 7 July 2014 sought the  Authority’s recommendations for delinking of licensing of networks from delivery of services by way of virtual network operators etc. including associated  issues   such as Adjusted Gross Revenue, terms of sharing of passive and active infrastructure under unified licensing regime.
     
    TRAI had earlier released a pre-consultation paper on “Delinking of the license for  networks from delivery of  services by  way of  Virtual Network Operators” on 3 September 2014 highlighting some of the issues associated with the proposed licensing framework by the DoT and had solicited inputs and comments of the  stakeholders on these issues or any other issues involved in the proposed  framework.
     
    The paper issued today raises specific issues for consideration by stakeholders. A consultation paper on ‘Definition of revenue base (AGR) for the reckoning of license fee and spectrum usage charges’ has been already issued on 31 July 2014.

    Therefore, this consultation paper is   limited to the issues related to delinking of licenses for networks from the delivery of services by way of virtual network operators.
     
    TRAI also wonders if a business case exists for introduction of VNOs in all segments of Voice, Data and Videos and whether VNOs should be introduced in all or some of the services notified in the Unified licence.

    It also wants to know if there is sufficient infrastructure (active and passive including access spectrum) available with a TSP to meet its own requirements. If any TSP is able to share its infrastructure with VNOs, the regulator wants to know what the broad terms and conditions for sharing the infrastructure should be.

    Can VNOs be allowed to create their own infrastructure to reach out to niche markets, the Regulator asks, or can local Cable Operators (LCOs) or Multi System Operators (MSOs) with cable networks be permitted to share infrastructure with VNOs to provide last mile connectivity.

    The regulator wants to know if a VNO be issued a license at the National Level or for LSAs as in the case of UL or should it be based on the host NSO license areas and the duration of the licence.

    It also has questions about any cross-holding restriction between a NSO and VNOs and the financial obligations of VNOs in the form of a) Equity & Networth b)Entry Fee c)PBG and d)FBG etc.

     

  • TRAI is working on amending QoS regulation: N Parameswaran

    TRAI is working on amending QoS regulation: N Parameswaran

    MUMBAI: It has been nearly three months since the Telecom Regulatory Authority of India (TRAI) came up with its consultation paper on levying financial disincentives on multi system operators (MSOs) and local cable operators (LCOs) who are delaying the process of billing in the digital addressable system (DAS) areas of the country.

    Although it has been long since the deadlines for commencement of billing in DAS areas got over, there is no clue on how the whip will be cracked on those who haven’t gone beyond installing set top boxes in phase I and II.

    TRAI principal advisor N Parameswaran says, “We are in the process of working on the amendment to the Quality of Service (QoS) regulation. The comments have come and we are yet to take a final decision on the same.”

    Meanwhile, the MSOs that indiantelevision.com spoke to have said that billing has happened only in few areas of New Delhi and Kolkata while the remaining cities in DAS phase III and IV don’t even have proper consumer application forms (CAFs).

    TRAI earlier had said that it is seeking to implement financial penalties on those MSOs and LCOs who defy the law. Comments had been asked from stakeholders on the same. The regulator had also said that for non-compliance of issuing bills, a disincentive of not exceeding Rs 20 per subscriber will be levied on the MSO and/or its linked cable operator and for the second time, penalty would be Rs 50. “For non-compliance of regulations, Rs 100 will be levied on each MSO for each contravention. If the MSO and LCO have entered into an agreement, both of them will be penalised for faults while in the case of no deal being signed, only the MSO is liable to pay,” TRAI had said.

    As per the consultation paper, the amendment, when approved, will come into effect 30 days from the date of publication.

     

  • TRAI issues draft tariff order for non addressable cable TV systems

    TRAI issues draft tariff order for non addressable cable TV systems

     

    MUMBAI: The Telecom Regulatory Authority of India (TRAI) has come out with its draft tariff order for non addressable cable TV system and is asking for comments on the same from stakeholders.

     

    This comes after the Supreme Court’s order in September wherein it had asked stakeholders to submit views by 30 September, which the TRAI has now extended by 15 December, which it says will be final.

     

    To be called Telecommunication (Broadcasting and cable) services (seventh) (non-addressable systems) Tariff Order, 2014 (draft) it will come into effect from 1 January 2015 and will be applicable to broadcasting and cable services provided to cable subscribers throughout India through non addressable systems. The Telecommunication (Broadcasting and Cable) Services (Fourth) (Addressable Systems) Tariff Order, 2010 (1 of 2010) shall apply to only DAS areas.

     

    For wholesale tariff, broadcasters have to specify their channels rates both a-la-carte as well as bouquets provided that the a-la-carte and bouquet rates for  pay and free to air (FTA) channels shall not firstly exceed its current rate before the order comes into force.

     

    In a bouquet the sum of the a-la-carte rates of all channels shall not exceed 1.5 the rate of the entire bouquet. The a-la-carte rate of one channel will not exceed thrice the average rate of a pay channel. The bouquet composition as on 1 December 2007 shall not change.

     

    If a bouquet is to be modified post this order coming into existence, this is how it will be calculated: The rate of the modified bouquet = [rate of the existing bouquet] x [sum of a-la-carte rate of pay channels comprising the modified bouquet/sum of a-la-carte rate of all the pay channels comprising the existing bouquet].

     

    Rates of channels or bouquets can only be increased by a TRAI order while it can be reduced without the same. For conversion of channels from pay to FTA or discontinuation, the bouquet prices need to be modified accordingly. New channel launches will be priced similar to other channels in its genre and language. For new launches or conversions, a-la-carte as well as bouquet rates shall be declared 30 days in advance.

     

    The charges that a local cable operator (LCO) shall pay to a multi system operator (MSO) will have to be mutually decided. The LCOs have been told to issue bills to subscribers with a breakup of the number of channels, the charges levied (excluding taxes), nature and rates of taxes levied and amount thereof and then issue a receipt for the same.

     

    The draft tariff order is proposed for the cable TV services offered through non addressable (analogue) cable TV systems. The operators who implement DAS before the notified cut off dates for phase III and IV will be governed by the DAS regulatory regime.

     

    The Telecommunication (Broadcasting and Cable) Services (Second) Tariff Order 2004 (6 of 2004) has been repealed with this new one that will be called the Telecommunication (Broadcasting and cable) services (seventh) (non-addressable systems) Tariff Order, 2014 (draft).

     

    The Supreme Court in its order has disposed off the appeals, while leaving all the questions of law open. It also ordered that status quo will continue till 31 December 2014. The order further stated that TRAI will attempt to notify the fresh tariff order immediately after 31 December 2014. Since the last consultation paper had been given out in 2010, TRAI felt that stakeholders need to relook entirely.

     

    On 10 February 2014 five amendments, to the tariff orders and regulations were notified by TRAI. These amendments were made to bring in clarity in the roles and responsibilities of the broadcasters and their authorised agents. On 31 March 2014, eleventh amendment to the tariff order applicable for non-addressable cable TV systems was notified by TRAI to allow inflationary adjustment at, both, retail and wholesale levels.

     

     

    Click here to read the consultation on draft tariff order

     

    Click here to read the press release

     

    Click here to read the report submitted to Supreme Court

  • Bibhash Jha quits Star Sports, joins Siti Cable

    Bibhash Jha quits Star Sports, joins Siti Cable

    MUMBAI: Multi system operator (MSO) Siti Cable has roped in Bibhash Jha as its head-content & carriage. Jha in his capacity will provide a fillip to the growth momentum of Siti Cable. The MSO is taking giant strides in this exciting phase of digitisation and Jha will play an instrumental role in this leap from analog to absolute digitisation.

     

    Jha has over 20 years of distribution work experience with 15 years at Star Sports India, where he played an instrumental role in the transition of ESPN channel to Star Sports India. In 2007, he played a key role in the launch of new sports channel Star Cricket. Under his ambit, a separate vertical of MSO business was created which was profitable in its very first year of operation. He was also responsible for the distribution of sports channel for Star on pan India basis.

     

    Siti Cable executive director and CEO VD Wadhwa said, “We are delighted to have Bibhash Jha on board. With his rich experience of broadcasting & distribution business, he brings to us a competitive edge in strategizing business and accomplishing organisational goals.”

     

    Jha will be based at the Corporate Office of Siti Cable, Noida.

     

  • Kolkata LMOs in talks with STB and headend vendors

    Kolkata LMOs in talks with STB and headend vendors

    KOLKATA: The last mile owners (LMOs) in Kolkata are gearing up to stake claim on their subscribers. Apart from uniting and setting up their own control room and tie-ups with existing DAS license holders, the LMOs have initiated talks with the STB and headend suppliers and other vendors in India and as well as abroad.

     

    The LMOs have already made an agreement with a DAS license holder, who will levy a minimum price against every set top box (STB). “Recently, more than 150 LMOs signed the deal. And thousands of LMOs from different MSOs are also showing interest to join in this mission,” says a LMO on the condition of anonymity.

     

    “The LMOs have already formed a company as they intend to counter the MSO business. We are also trying to take control over our business,” informs Cable Operators Sangram Committee general secretary Apurba Bhattacharya.

     

    He adds, “It is a survival battle; either we set up our own headend or partner with MSOs. As for the investment, every LMO will put in the amount according to their pockets. In fact, some financiers are also ready to invest in it.” He further explained that the investment would be based on the size of LMO’s network.

     

    Tying up with existing license holders ensures LMOs power of billing to subscribers, distribution of package according to the choice of subscribers, share of carriage fee and ownership of STBs.

     

    There are some DAS license holders who might go ahead and increase their topline and bottomline by strengthening their presence.

     

  • No progress in Arasu application for MSO licence for DAS

    No progress in Arasu application for MSO licence for DAS

    NEW DELHI: There is no progress in the application of Tamil Nadu Arasu Cable TV Corporation Limited for the MSO licence, if one goes by the reply given in Parliament by Minister of State for Information and Broadcasting Rajyavardhan Rathore.

     

    He said the matter is being examined in the light of the recommendations of the Telecom Regulatory Authority of India (TRAI) regarding entry of government entities in the broadcasting and distribution activities.  TRAI had in reports in 2008 and early this year reiterated that government entities and political parties should not be permitted to enter the broadcasting sector.

     

    The Ministry had received a letter of 3 June 2014 from the then Tamil Nadu Chief Minister J Jayalalitha for grant of multi system operator registration to Arasu Cable TV Corporation Limited for operating in the Digital Addressable System (DAS) notified areas of Tamil Nadu.

     

    The Ministry has so far granted 129 permanent MSO registrations for operating in DAS notified areas. The details are available on the Ministry’s website www.mib.nic.in.

     

    “No licences have been granted in respect of DTH services during the last three years,” the Minister said. DTH licenses are granted under “DTH guidelines issued on 15 March 2001.”

     

    Under the Cable Television Network (Regulation) Act 1995, Cable Operators are required to get registrations from Post Offices. However, under the amendment in Cable Television Network (Regulation) Act 2011, the multi system operators are required to get registration from the Ministry for operation in Digital Addressable Systems (DAS) notified areas.