Operators unhappy with formula on revenue sharing
B V Shiva Shankar | TNN | Updated: Dec 26, 2018, 11:02 ISTBENGALURU: Apart from the notion that entertainment would get expensive, the bone of contention in the new tariff regime for TV viewing is the revenue-sharing formula, with local cable operators (LCOs) ruing that it would be detrimental to their business.
As per the formula prescribed by Telecom Regulatory Authority of India, multi-service operators (MSOs) and LCOs will share the network capacity fee (NCF) of Rs 130 in a minim um ratio of 55:45. Broadcasters will have no share in NCF, by paying which viewers will get to watch 100 channels, including 26 mandatory Doordarshan channels.
In case of pay channels, 65%-80% of the MRP will go to broadcasters, while the remaining will be shared between MSOs and LCOs in a 55:45 ratio. “This will make the business of cable operators, who have invested on infrastructure and people, unviable. If you ask us to share 20% with MSOs after paying broadcasters, we will be left with peanuts,” said MK Mallaraje Urs, president, Karnataka Digital Cable TV Owners Welfare Association.
Currently, MSOs and LCOs share revenue from subscription fee on a 50:50 basis, and MSOs pay broadcasters from their share. “We demand NCF be given entirely to LCOs. Pay channel MRP should be shared among broadcasters, MSOs and LCOs in a 50:25:25 ratio,” said VS Patrick Raj, president, Karnataka State Cable TV Operators Association.
TRAI officials said while the share prescribed for broadcasters is not negotiable, it’s up to MSOs and LCOs to work out a compromise. “The tariff order has put in place broad guidelines, and MSOs and LCOs are free to decide on the revenue-sharing ratio among themselves,” said Aravind Kumar, adviser, TRAI.
LCOs from across India are set to congregate at Jantar Mantar in New Delhi on Wednesday to stage a demonstration in support of their demand that the revenue-sharing formula be changed. Most of the 17,000 LCOs from Karnataka are taking part, Raj said.
LCOs are also demanding extension of the December 29 deadline for rolling out of the regime by at least three months, by which they could activate all set-top boxes depending on users’ preferences. Their main demand is that MSOs give passwords for set-top boxes to customers so that they are portable. “The real owners of set-top boxes are consumers who have bought them for up to Rs 2,000, but MSOs have the passwords. Hence, users can’t change MSOs with the same set-top box,” Raj said.
As per the formula prescribed by Telecom Regulatory Authority of India, multi-service operators (MSOs) and LCOs will share the network capacity fee (NCF) of Rs 130 in a minim um ratio of 55:45. Broadcasters will have no share in NCF, by paying which viewers will get to watch 100 channels, including 26 mandatory Doordarshan channels.
In case of pay channels, 65%-80% of the MRP will go to broadcasters, while the remaining will be shared between MSOs and LCOs in a 55:45 ratio. “This will make the business of cable operators, who have invested on infrastructure and people, unviable. If you ask us to share 20% with MSOs after paying broadcasters, we will be left with peanuts,” said MK Mallaraje Urs, president, Karnataka Digital Cable TV Owners Welfare Association.
Currently, MSOs and LCOs share revenue from subscription fee on a 50:50 basis, and MSOs pay broadcasters from their share. “We demand NCF be given entirely to LCOs. Pay channel MRP should be shared among broadcasters, MSOs and LCOs in a 50:25:25 ratio,” said VS Patrick Raj, president, Karnataka State Cable TV Operators Association.
TRAI officials said while the share prescribed for broadcasters is not negotiable, it’s up to MSOs and LCOs to work out a compromise. “The tariff order has put in place broad guidelines, and MSOs and LCOs are free to decide on the revenue-sharing ratio among themselves,” said Aravind Kumar, adviser, TRAI.
LCOs from across India are set to congregate at Jantar Mantar in New Delhi on Wednesday to stage a demonstration in support of their demand that the revenue-sharing formula be changed. Most of the 17,000 LCOs from Karnataka are taking part, Raj said.
LCOs are also demanding extension of the December 29 deadline for rolling out of the regime by at least three months, by which they could activate all set-top boxes depending on users’ preferences. Their main demand is that MSOs give passwords for set-top boxes to customers so that they are portable. “The real owners of set-top boxes are consumers who have bought them for up to Rs 2,000, but MSOs have the passwords. Hence, users can’t change MSOs with the same set-top box,” Raj said.
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