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Presentation ByPresentation By
Cable Operators Federation of India (COFI)Cable Operators Federation of India (COFI)
Digitalisation Heading Nowhere!Digitalisation Heading Nowhere!
TDSAT Seminar, Nainital (Uttarakhand) TDSAT Seminar, Nainital (Uttarakhand) 22 August 201522 August 2015
Mobile: [email protected]
Mrs. Roop SharmaPresident
Digitalisation Law Introduced for -Digitalisation Law Introduced for -
1.1. TransparencyTransparency
a) Revenue to Government.a) Revenue to Government.
b) Pay Broadcasters to get full revenue.b) Pay Broadcasters to get full revenue.
c) Correct TRPs.c) Correct TRPs.
2.2. Consumers to get good quality cable service, Consumers to get good quality cable service, Broadband, Internet at reasonable rates.Broadband, Internet at reasonable rates.
3.3. A-la-carte choice and lowered billing to consumers. A-la-carte choice and lowered billing to consumers.
4.4. LCO/ LMO not to go out of businessLCO/ LMO not to go out of business..
5.5. Increase in ARPUs through VAS like VoD, Games, e-Increase in ARPUs through VAS like VoD, Games, e-Services.Services.
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NEW ERA- NAYA DIGITAL ZAMANANEW ERA- NAYA DIGITAL ZAMANA
Digitalisation is good but …..Digitalisation is good but ….. Regulations are biased in favour of Regulations are biased in favour of
broadcasters & MSOsbroadcasters & MSOs Method of implementation is WRONG.Method of implementation is WRONG. Time lines are not practical/ Prerequisite Time lines are not practical/ Prerequisite
not done.not done. REVENUE SHARE NOT FAIR FOR REVENUE SHARE NOT FAIR FOR
LMOS- TOO LESS TO SUSTAIN LMOS- TOO LESS TO SUSTAIN BUSINESSBUSINESS..
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Before DigitalisationBefore Digitalisation
44
After DigitalisationAfter Digitalisation
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TRAI’s Draconian Regulations that are TRAI’s Draconian Regulations that are Dangerous to Cable Operator’s BusinessDangerous to Cable Operator’s Business
Tariff Order :dt. 30.04.12 (No 3 of 2012) Tariff Order :dt. 30.04.12 (No 3 of 2012)
Interconnect regulation dt. 30.04.12 (No 9 of Interconnect regulation dt. 30.04.12 (No 9 of
2012) 2012)
Quality of Service regulations: dt:14.05.2012 Quality of Service regulations: dt:14.05.2012
( No 12 of 2012)( No 12 of 2012)
Consumer Complaint Redressal (DAS) Consumer Complaint Redressal (DAS)
Regulations dt:14.05.2012 (No.13 of 2012)Regulations dt:14.05.2012 (No.13 of 2012)66
Telecommunication (Broadcasting Telecommunication (Broadcasting and Cable) Services (Fourth) and Cable) Services (Fourth) (Addressable Systems) Tariff (First (Addressable Systems) Tariff (First Amendment) Order, No.3 of 2012 dt Amendment) Order, No.3 of 2012 dt 30 Apr 201230 Apr 2012 Revenue share of LCO to be decided by MSO Revenue share of LCO to be decided by MSO after after
mutual negotiations. LCO does not get a fixed revenue mutual negotiations. LCO does not get a fixed revenue per subscriber to survive his business as done in CAS.per subscriber to survive his business as done in CAS.
Clause 4(a) of Tariff Order Clause 4(a) of Tariff Order : FTA & Bouquet of FTA : FTA & Bouquet of FTA Channels, Revenue share of MSO-55%, LCO-45% as a Channels, Revenue share of MSO-55%, LCO-45% as a fallback arrangement.fallback arrangement.
Clause 4(b) of Tariff OrderClause 4(b) of Tariff Order: Pay Channels and their : Pay Channels and their Bouquet. Revenue Share of MSO- 65%, LCO- 35% as Bouquet. Revenue Share of MSO- 65%, LCO- 35% as fallback arrangement.fallback arrangement.
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Tariff Order No. 3 of 2012 Tariff Order No. 3 of 2012 Dt. 30 Apr 2012 (Contd)Dt. 30 Apr 2012 (Contd)
Clause 6(1) (B) of Tariff OrderClause 6(1) (B) of Tariff Order: MSO to decide rate of BST : MSO to decide rate of BST Bouquet- Not to exceed Rs 100, can be lower than this, thus Bouquet- Not to exceed Rs 100, can be lower than this, thus revenue share of LCO can also go down lower than Rs 45.revenue share of LCO can also go down lower than Rs 45.
Clause 6(1) (D)Tariff OrderClause 6(1) (D)Tariff Order: subscriber of DAS to subscribe a : subscriber of DAS to subscribe a basic service tier or basic service tier and one or more pay basic service tier or basic service tier and one or more pay channel or only free to air channels or only pay channels or pay channel or only free to air channels or only pay channels or pay channels and free to air channels. (Note: If subscriber subscribes channels and free to air channels. (Note: If subscriber subscribes only a few pay channels, LCO share will further go down).only a few pay channels, LCO share will further go down).
Clause 6(1) (E) Tariff OrderClause 6(1) (E) Tariff Order: MSO will decide rate of Pay : MSO will decide rate of Pay channels or their bouquet with a minimum monthly subscription, channels or their bouquet with a minimum monthly subscription, not exceeding Rs 150 (exclusive of taxes) per month.not exceeding Rs 150 (exclusive of taxes) per month.
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Revenue Share Revenue Share
BONE OF CONTENTIONBONE OF CONTENTION LCO/LMO Builds, Operates, Maintains LCO/LMO Builds, Operates, Maintains
Network and provide Service to Network and provide Service to
consumer, collect Tax butconsumer, collect Tax but
MSO DECIDES HIS REVENUEMSO DECIDES HIS REVENUE LMO/ LMO Share -LMO/ LMO Share - 35% of Pay Channels35% of Pay Channels 45% OF BST (Basic Service Tier of FTA Channels)45% OF BST (Basic Service Tier of FTA Channels) NEGOTIATION/ OFFER OF MSO on Revenue share is Temporary, only NEGOTIATION/ OFFER OF MSO on Revenue share is Temporary, only
an EYEWASH to trap and divide LMOs.an EYEWASH to trap and divide LMOs. MSOs provide same CONTENT but different offers.MSOs provide same CONTENT but different offers. Payment of TaxesPayment of Taxes TRAI should Relook on MSO/ LCO relationship & Revenue Share.TRAI should Relook on MSO/ LCO relationship & Revenue Share.
NOW MSO Negotiations an Eye-Wash. If fails, only 35% NOW MSO Negotiations an Eye-Wash. If fails, only 35% for LCO/ LMOfor LCO/ LMO
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Average Content Cost Average Content Cost per Subscriber based on RIOper Subscriber based on RIO
1010
Particulars In Rs
Total RIO Rate( Without 27.50%)Total RIO Rate(with 27.50%)
490625
DTH and Cable Industry Estimated Average Content cost per Subscriber
90-100
% of Total RIO Rate(Without 27.50%)% of Total RIO Rate(With 27.50%)
19-20%15-16%
Cable TV estimated average content cost for Pay Broadcaster affiliated MSOs
30-40
% of Total RIO Rate (Without 27.5%) % of Total RIO Rate(With 27.5%)
7-8%5-6%
Cost to OTT subscribers for same content Free
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1212
Unfair Revenue ShareUnfair Revenue Share
1313
Set Top BoxSet Top Box
MSO- Purchased low quality STBsMSO- Purchased low quality STBs No BIS StandardsNo BIS Standards No BEE RatingsNo BEE Ratings Old MPEG2 technology, not MPEG4Old MPEG2 technology, not MPEG4 No InteroperabilityNo Interoperability No Local repairs, No guarantee/ Warranty cardNo Local repairs, No guarantee/ Warranty card Consumers do not own the STBsConsumers do not own the STBs Regulations demand STBs available in open marketRegulations demand STBs available in open market No receipts given for the cost paidNo receipts given for the cost paid Did not sell on paper to avoid tax (VAT)Did not sell on paper to avoid tax (VAT) Activation fee is not permitted but no action by TRAI on Activation fee is not permitted but no action by TRAI on
MSOs who refuse to stop collecting it.MSOs who refuse to stop collecting it.1414
Why Such regulations? Why Such regulations?
LACK OF KNOWLEDGE of LMOs/ LCOsLACK OF KNOWLEDGE of LMOs/ LCOs Pay Broadcasters and MSOs are too Pay Broadcasters and MSOs are too
Active in capturing the ground (game Active in capturing the ground (game plan)plan)
Vertical integrated MSOs played Active Vertical integrated MSOs played Active Role.Role.
MSOs kept their JV/Distributors too MSOs kept their JV/Distributors too happy and busy –(Foreign Trips/ Parties). happy and busy –(Foreign Trips/ Parties).
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Why Such regulations? (contd)Why Such regulations? (contd) They did not pass information to LCO/LMOs.They did not pass information to LCO/LMOs. LCO/ LMO – Completely unaware, Fragmented, LCO/ LMO – Completely unaware, Fragmented,
infighting, Got busy in alternate business as infighting, Got busy in alternate business as suffering lossessuffering losses
Never answered any TRAI consultation or attended any Never answered any TRAI consultation or attended any Open House. Government’s awareness drive not sincere. Open House. Government’s awareness drive not sincere. LCO representation kept minimum in Task Force LCO representation kept minimum in Task Force
Vertical Integrated MSOs took advantage of situation and Vertical Integrated MSOs took advantage of situation and lobbying in TRAI & I&B.lobbying in TRAI & I&B.
MSOs and Aggregators used ‘MSOs and Aggregators used ‘divide and ruledivide and rule’ on LCOs’ on LCOs
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This is what TRAI Regulations didThis is what TRAI Regulations did
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Don’t Let This Happen to Don’t Let This Happen to YouYou
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