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Tag: SitiCable Network

  • TDSAT asks Siticable not to disconnect signals of 119 Bhopal LCOs

    TDSAT asks Siticable not to disconnect signals of 119 Bhopal LCOs

    NEW DELHI: The Telecom Disputes Settlement and Arbitration Tribunal (TDSAT) has directed Siticable Network to not disconnect the supply of signals to 119 cable operators represented by the Bhopal Cable Operator Association.

     

    TDSAT chairman Aftab Alam along with members Kuldip Singh and B B Srivastava gave the order in view of a statement made by the LCO association’s counsel Nittin Bhatia that all due payment had been made.

     

    Bhatia had said the LCOs have made up-to-date payments as per the invoices issued by Siticable and continue to make payment at the rate at which invoices of June 2015 were issued.

     

    Bhatia told the Tribunal that he had the authorisation from 67 cable operators but would get authorisation from the remaining 52 operators within a week.

     

    The Tribunal said the status of any cable operator who is in dues will be determined on the basis of reconciliation of accounts and dues if any would be cleared within two weeks from the ascertainment of the said amount.

     

    The Tribunal also said that the parties would be well advised to resolve their disputes through the process of mediation and directed both sides to appear before the Mediation Centre on 7 September.

     

    The primary grievance of the Association is that the respondent is unilaterally and steadily increasing the monthly subscription fees payable by them. According to Bhatia, the cable operators paid the monthly subscription at the rate of Rs 30 per STB up to March 2013 and thereafter at Rs 60 per STB and now the invoices being raised by the respondent are at the rate of Rs 83.11 paise (excluding taxes) for the package of channels supplied by it.

     

    Siticable counsel Tejveer Singh Bhatia did not have full instructions in the matter but stated 

  • After Manthan, SitiCable tries to poach DTH customers

    After Manthan, SitiCable tries to poach DTH customers

    KOLKATA: Sometime back, city-headquartered Manthan Broadband Services announced a scheme to poach Dish TV customers after the DTH provider created sub-brand ‘Zing’ to offer STBs free of cost and target regional markets.

     

    Now, SitiCable Network is all set to follow in Manthan’s footsteps with an exchange scheme for DTH customers so they can opt for SitiCable services without having to pay anything for STBs as well as their installation in DAS I and II areas.

     

    According to Kolkata director Suresh Sethiya, the scheme called ‘Value for Money’ will be launched next month. Sethiya further informed that SitiCable is aiming to install another 3 lakh STBs in West Bengal by the end of April. “Customers choosing SitiCable services instead of their DTH service providers will also have the option of going for channel packages that regular customers get and this is a value for money proposition for them,” he added.

     

    How will SitiCable gain through the scheme? “Well, the scheme is to increase our market presence and not to increase our topline or bottomline. We want to be market leaders. And once we are able to convert DTH customers to our customers, we will think of monetizing it,” answered Sethiya.

     

    On the installation of an additional 3 lakh STBs, he said that the company was eager to increase its penetration in the state as cable TV digitisation was in full swing across the eastern region. “We would always try to retain its number one position here,” he said. “We are upbeat about our penetration and growth in West Bengal. In North Bengal too, we are looking at some acquisition and forming a joint venture with local partners.”

     

    While West Bengal is one of the most important markets for SitiCable in the eastern region, the company also has a good presence in Patna, Odisha and Jharkhand. A cable analyst said on the condition of anonymity, “The eastern region accounts for around 40 per cent of the revenue to SitiCable and is one of the most important markets for the company.”

     

    The company is also present in six out of the seven north-eastern states. Commenting on Manthan’s scheme and now SitiCable, the cable analyst said, “In the coming months, we expect more such announcements by players of different categories to poach each others’ business and clients.”

  • National and local MSOs meet in Kolkata to discuss billing process

    National and local MSOs meet in Kolkata to discuss billing process

    KOLKATA: The multi system operators (MSOs) seem to be in full swing to bring the gross billing system in place. This time, to discuss the smooth rollout of gross billing in the Kolkata Municipal Area (KMA), the national representatives of MSOs that included SitiCable Network and Den Networks, along with the local players like Manthan and AMBC among few others met and signed a deal to expedite the process. 

     

    Kolkata has 30 lakh cable homes and most of them still get ad hoc bills from the MSOs. Thus, to implement the gross (consumer) billing for January, and bring transparency in the entire process, the MSOs have requested cable TV subscribers to ask for bills from the local cable operators (LCOs) before paying the monthly subscription charges.

     

    In fact, in order to ensure that the gross billing process is smooth in the KMA area, the MSOs from national and eastern regions meet regularly, especially after West Bengal and the central government authorities have asked them to speed up the process.

     

    “Today’s meeting was on the smooth rollout of the billing. Customers should ask for a bill from the LCOs before paying their bills every month,” said AMBC managing director Sujit Das.

     

    Siticable Kolkata director Suresh Sethia also brought to notice that the MSOs have conducted a check on the overall implementation of digital addressable system (DAS) including the billing and collection process.  

     

    According to the regulations set by the Telecom Regulatory Authority of India (TRAI), subscribers will get 15 days from the date of the bill to make the payment. “In case the subscriber fails to make the payment till the due date, we may charge interest on the outstanding amount,” said Sethia, also adding that in the recent meeting the MSOs have decided to be firm on these agendas.

     

    The seriousness of the MSOs is evident as most of them have uploaded the bills on the server, and some have even given the print outs to the LCOs so that bill collection can be done, remarked a city based analyst.

  • Once we move to gross billing, revenue will increase three-fold: V D Wadhwa

    Once we move to gross billing, revenue will increase three-fold: V D Wadhwa

    These are changing times for the Indian cable TV industry, what with gross (consumer) billing starting in phase I cities and 27 January being the last date for submission of duly-filled Consumer Application Forms (CAF), following which, multi system operators (MSOs) will need to start major switch-off of signals.

     

    In all of this, Essel Group-owned SitiCable Network, earlier known as Wire and Wireless (India) Ltd, has proved to be a game changer of sorts. Under the leadership of chief executive officer V D Wadhwa, the company has been at the forefront of change; whether it is giving access to the Subscriber Management System (SMS) to local cable operators (LCOs), launching local cable TV channels or the latest plan to launch a service on iOS and Android for consumers to view TV content on their Apple devices and smart phones.

     

    An alumnus of Harvard Business School and a fellow member of the Institute of Company Secretaries of India, Wadhwa served as managing director and CEO for business operations in India and SAARC countries with the Timex Group before taking charge as the CEO of SitiCable Network in May 2013.

     

    An avid squash player who dabbles in adventure sports, travelling and driving, Wadhwa took some time out from his busy schedule to speak to Seema Singh of indiantelevision.com on gross billing, setting up of cooperatives and the road ahead for SitiCable.

     

    How has phase I and II of digitisation been for SitiCable? How much has been invested and what have been the returns?

     

    We have approximately 10 million subscribers in the analogue universe. Of these, we have seeded 3.6 million Set Top Boxes (STB) in phase I and II of digitisation. The total investment so far has been to the tune of more than Rs 500 crore.

     

    As far as the returns are concerned, the investment has been done with a payback period of four years. Expecting anything in the short term is not a realistic scenario. No one gets returns on investments immediately.

     

    How many set top boxes will be needed for completing phase III and IV? What is the proposed investment for these phases? How are you looking at generating investment in the company?

     

    Phases III and IV of digitisation has a total universe of about 90 million. Of these, we are targeting 6-7 million homes. At a gross level, we will require an investment of Rs 1200 crore. On a net basis, we are expecting an investment to the tune of Rs 600 crore.

     

    The funding of Phase III will be largely done through warrants’ funding of Rs 243 crore, which is likely to be invested by promoters before March 2014. Balance funding requirement will be met through internal accruals and raising of further equity, as may be required.

     

    By when do you think you will be able to reap the benefits of digitisation? By what percentage do you see the revenue going up?

     

    The benefits of digitisation have already started trickling in and the full benefits will be visible from FY16.

     

    Once we move to gross billing, the revenue will increase over threefold of what it is currently. Right now, whatever revenue is booked in the books of accounts is on net and not gross basis. Last year for the year ended March 2013, our top line was Rs 483 crore. In the last two quarters, we have achieved revenue of over Rs 300 crore and this growth trend in the current quarter continues. Once gross billing starts, the revenue will increase to over three-fold. 

     

    Have you come to any consensus on revenue share and billing with Last Mile Owners (LMOs) in Maharashtra? Are you going to allow LMOs to bill in Mumbai? By when do you see billing starting in Mumbai?

     

    We have a 33 per cent revenue share with all our local cable operators (LCOs) and we do share 25 per cent of the carriage revenue with them, which is not the case with other Multi System Operators (MSOs). So, we are not facing any problem anywhere in the country. We have also given access to the Subscriber Management System to LCOs. Our approach is to consider the LCO as an integral part of the business and both the MSO and LCO have to co-exist. We, therefore, believe in empowering the LCOs by training them and providing them the backend support to enable them provide better customer services. This is the biggest advantage for SitiCable and this is helping us to significantly improve our subscription revenues as compared to other MSOs.

     

    Now that billing has started in Phase I cities, how has the response been? Do you think billing has succeeded in bringing in greater transparency? How is it helping the MSOs?

     

    It is too early to comment. The LCOs are not habituated to the system of gross billing. According to me, it will take at least two to three months for billing and collection to stabilise as per package. But there is gradual acceptance among the LCOs for the gross billing regime. .

     

    Also, I would like to add that in Delhi, between Hathway Cable & Datacom, DEN Networks and SitiCable, we have engaged Mckinsey to help us stabilise the gross billing and gross collection. They will ensure that all MSOs follow the common policy of billing, collection and dunning. Since gross billing started in December, it is expected to stabilise in the current quarter.

     

    The Telecom Regulatory Authority of India (TRAI) had given 27 January as the deadline to MSOs for collection of all Consumer Application Forms (CAFs) and feeding of details in the SMS for phase II cities. Are you switching off signals or is the process complete?

     

    We received 94-95 per cent CAFs in phase I cities and for the remaining, the signals have been switched off. So in that way, we have completed 100 per cent CAF in phase I and submitted the compliance report to the TRAI. For phase II, 91 per cent of CAF has been completed. The regulator for all these months has been patient in giving us extensions. And, I personally believe if the deadline goes on getting postponed, the work will never be completed. The ultimate solution for these problems is to switch off signals for those who have not filled the forms and that is what we are doing, which is in complete compliance with TRAI’s order. In fact, in the last one week, we have switched off 50,000 subscribers nationally. This is to ensure that compliance as per TRAI regulation is achieved.

     

    Where do you see entertainment tax headed? What led to taking the matter to court? Do you think the ruling will be passed in your favour? Do you believe that entertainment tax should be reduced?

     

    As per the law, the MSO is responsible for entertainment tax. We approached the Delhi High Court, since we have always been collecting and depositing entertainment tax, and we did not want to face any coercive action being taken by the tax authorities. As per our information and inputs received from the market, other MSOs are also collecting tax from LCOs regularly. While the H’ble high court has asked SitiCable to keep submitting the entertainment tax, the high court has given the stay against any coercive action being taken by the Tax Department against other MSOs since they have taken the plea that they are not invoicing and collecting tax so far. No decision has been taken on who will be responsible for collecting and paying the entertainment tax as yet.

     

    In SitiCable, we firmly believe that the payment of entertainment tax should be with the MSOs. Since the invoice is being raised by the MSO and the LCO is collecting the subscriber fee, I feel the power of collecting and depositing entertainment tax should be with the MSOs.

     

    I have a very different view on entertainment tax. I do not understand why a consumer needs to pay both service tax and entertainment tax. When we provide them with cable TV, what is it? Is it a service or entertainment? Even for movies, consumers pay only entertainment tax, then why is it that the consumer has to pay entertainment tax and service tax for cable TV. We have raised this issue on several occasions to both the Information and Broadcasting Ministry and the TRAI, but without any heed.

     

    The tax rate has to rationalise across the country. In UP, the monthly entertainment tax is 25 per cent of the subscription fee, while in Maharashtra, it is Rs 45; Delhi – Rs 20; Bengaluru – 6 per cent of the total subscription fee; and Kolkata, it is Rs 10. This differential tax structure will not allow the industry and gross billing to stabilise in these respective states.

     

    I am hopeful that the tax will come down once the process of digitisation is complete. Currently, the tax department is unable to gain significantly due to digitisation. With complete digitisation, there will be transparency and hence, more tax collection. Then there will be rationalisation of tax.

     

    By when do you think the process of digitisation will be complete?

     

    There is no reason why digitisation will get delayed. The I&B Ministry is dedicated and so is the TRAI. Even the MSOs are gearing up for funding, getting STBs and seeding them. So I don’t see any delay in completion of digitisation.

     

    Is the cable TV industry prepared to offer consumer service as available internationally?

     

    I think there is a long way to go for that. We are taking one thing at a time. Currently, the Indian consumer is not even habituated to gross billing and taxation. The Indian cable TV market has not matured enough to be able to offer services like those internationally. Once gross billing is stabilised and every one becomes habituated with the system, only then we can move forward.

     

    However, from the Value Added Services (VAS) point of view, we have started broadband service in the east and soon, we will be starting in the north. Also, we will be providing content on multiple screens to our subscribers.

     

    Is broadband a key play in your revenues going forward? How will it be delivered?

     

    Of course, broadband will play a key role. We will also soon introduce Docsis 3.0, which is the future. Besides broadband, by the end of this quarter, the content available on TV will also be available on iOS and Android platforms. The technical team is working on it and if there are no glitches, we will be launching the service on both the platforms together. We are the first cable TV operator to have thought of this service.

     

    Do you believe building local cable TV channels is the way forward? How much will you invest in this? And what is the monetisation opportunity?

     

    Local cable TV channels help in connecting with the consumers. We plan to launch four to five channels in each geography. While we have seven channels in central India, seven in Jaipur and four in Delhi, we plan to continue with this in other parts as well.

     

    Launching local cable TV channels does not cost much since we already have a studio facility in areas where we have a presence. Such endeavours give a competitive edge over the Direct-to-home operator, since they cannot operate a local channel with local content and the MSO, as they do not have the facility for launching a local channel or have a rather small presence.

     

    A local channel helps in giving out local news in local languages and most people prefer this. Then, advertisements help in generating revenue. So commercially launching such channels makes sense for the MSO.

     

    How do we see the national landscape panning out: will there be a few key national MSOs? Who will these be?

     

    Like in phase I and II of digitisation, the market will be dominated by four national MSOs: Hathway, DEN, SitiCable and InCable. It is only after complete digitisation that the country can expect foreign players to enter the market. These foreign players will bring better technology, transparency and competition. This will prove beneficial for the national players as well.

     

    How do you see the MSOs coping with phase III and phase IV? Will DTH benefit? Or will we see new local players emerging?

     

    While in phase III, the existing MSOs will play a major role and benefit, phase IV will witness DTH playing a major role. In phase IV, with towns having 5,000-10,000 households, it will not be commercially viable for cable TV operators unlike DTH players.

     

    Local players may emerge in some markets, but as seen in phase I and II, the industry has been going through consolidation since digitisation requires huge Capex. The local players emerge since they can manage initial investments. But, they are not technology ready to serve consumers. Also, this is a highly regulated industry, which will be difficult for them to cope with. Considering they do not get placement fee from broadcasters, they can operate for a maximum of one to two years. 

     

    What challenges do you anticipate in Phase III and Phase IV?

     

    Content is the biggest challenge. Currently, the ARPUs for phase I and II cities is not more than Rs 150. If it remains the same for phase III and IV, it will be difficult for us to operate in these towns. Broadcasters need to have differential pricing for these markets.

  • MCOF and its MSO-LMO revenue sharing proposal

    MCOF and its MSO-LMO revenue sharing proposal

    MUMBAI: The struggle to find a solution on how multisystem operators (MSOs) and cable operators (LMOs – last mile owners) will work together in a digitised India continues.  The discussions between Maharashtra Cable Operators Federation (MCOF) and Hathway Cable & Datacom to come up with a workable arrangement had given some hope for a smooth rollout of MOS-LMO revenue shares, and consumer billing in Mumbai. But talks between the two seem to have come to a standstill for some time now. 

     

    Indiantelevision.com has got a hold of the proposed revenue share model which has been hammered out after a lot of thought and conversation: it takes into consideration operational expenses (OPEX) and the capital expenditure (CAPEX) of both the LMOs and MSOs.

     

    “It is as much in our interest as it is in the MSO’s to resolve the bottleneck, differentiate amongst subscribers and cater to their needs to optimise the network resources and push ARPUs up in the shortest time,” says MCOF president Arvind Prabhoo.  

     

    According to the proposed revenue sharing structure, the MSO: LMO share for free to air (FTA) channels should be 37 per cent : 63 per cent. For basic pay packages, the price range of which is Rs 150-Rs 250 (excluding taxes), the proposed revenue share is 45 per cent : 55 per cent; for advanced pay channels, which are in the price range of more than Rs 250, the revenue share proposed is 50 per cent : 50 per cent. For special/VOD packages, it is 75 per cent : 25 per cent and for HD channel packages it is 60 per cent: 40 per cent.

     

    “The best way for the industry to not only survive but prosper to its true potential is to work as a pure and true partnership business. MCOF will act as the collection management and settlement entity,” adds Prabhoo.  

     

    The MCOF model assumes that every MSO has two systems in place: the subscriber management system (SMS) and Financial Accounting System (FAS). The SMS hosts the entire subscriber details and is the basis of value chain reconciliation and audit.  

     

    “We have proposed that the MSO use this to generate end-customer bills with full details, factoring the LMO income share and taxes at various levels. These bills would be raised in the name of the LMO network and carry the tagline powered by the MSO,” says Prabhoo.

     

    The billing details, as per the proposal, will be pulled by MCOF and placed on the cloud and each LMO would gain access via the worldwide web using a mobile device or through a desktop.  The collection data is planned to  be captured in real time using MCOF approved technology, which is currently UPASS and updated on the MCOF cloud in real time and at the MSO-end either in real time or on an end of day basis.

     

    “We will work out the tax liability at LMO levels and guide them to use the technology to compile tax returns/challans. We will also reconcile the MSO-LMO accounts taking into account prepaid/post paid, online payments made to the MSO and unpaid customers,” informs Prabhoo.  

     

    Explaining the reason for the proposed revenue share, Prabhoo says, “The LMO has certain base expenses to cover, such as employees, office rent, repairs and replacements of shared infrastructure, audit and tax returns.”

     

    The effective OPEX for an LMO, according to MCOF for 1000 subscribers is Rs 109,500 a month. “The LMO’s per subscriber cost comes to Rs 109.5. We need at least Rs 109- Rs 110 to pay the employees and other costs. So this is the minimum and then comes profitability,” he highlights.

     

    The average CAPEX per subscriber is close to Rs 4000. Also, MCOF points that while the subscribers/employee ratio for an LMO is around 400, it is expected to be more than 5000 for a MSO. Thus making the OPEX element much higher for an LMO than an MSO.  

     

    Prabhoo feels that while the MSO is a wholesaler and LMO the retailer, the assumption of equal sharing as envisioned by the Telecom Regulatory Authority of India (TRAI) needs to be rectified and replaced by equitable sharing.

     

    “We have had detailed discussions with the TRAI on this and the matter will be reviewed sooner or later, but for sure it is not correct on TRAI to assume equal sharing by all three stakeholders,” he says.   

     

    The collection cost currently is entirely on the LMO while a good part of the monies flows to MSOs. This, according to MCOF needs to be allocated in the revenue share formula, if not actually computed and reimbursed. “For all practical purposes the LMO’s work load will increase as he acts as the marketing arm and administrative support system for the MSOs. Also, another round of set top box (STB) deployment/retrieval/repairs/replacement by HD boxes will entail quite a lot expense.”

     

    MCOF, in the email to MSOs, has also suggested that carriage fees should be clubbed with customer revenues, being a mathematical product of STBs in place and carriage fee per STB.

     

    MCOF has agreed that the UPASS technology, devices and connectivity costs will be borne by the LMOs. Also while integration, payment gateway, electronic processing and settlement system costs are incurred by the MSOs for direct connections or internet services, for any additional integration, the cost can be shared with the LMOs on a pro-rata basis.

     

    The LMOs are also suggesting carriage fee sharing as a loyalty bonus. “This can be mutually worked out,” says Prabhoo.  

     

    The new system will enable the MSO to see and monitor the exact collections made each month by the LMO and also the revenue due to the MSO, excluding taxes. While revenue will be booked in both books as per packages, the LMO will pay the MSO per month for all the collections made during the previous month after deducting taxes and the LMO share within seven days of the invoice being generated by the MSO.

     

    While MCOF is trying to move things forward, what’s stopping the MSOs? “Well! There are talks going on between the promoters of the MSOs. There is no consensus amongst the MSOs and that is what is taking time,” says a Hathway official on condition of anonymity.

     

    According to the official, the proposed revenue share by MCOF is acceptable, with minor changes. “But, all the MSOs operating in the state, have to come to a consensus, which I don’t see happening soon,” he says. The official feels that billing in Mumbai is most likely going to  be delayed further.

     

    SitiCable Network, which also has a presence in the country’s financial capital says it may soon conclude on how it will share revenues. “We are negotiating. We may announce our revenue share in a couple of days. Since, we have a small presence in the state, we are seeing what other MSOs are doing there,” explains  SitiCable Network chief operating officer Anil Malhotra.