This story first appeared in DNA Money edition on Friday, August 24, 2012.
Multi-system operators (MSOs) and television broadcasters have missed the August 21 deadline set by the Telecom Regulatory Authority of India (TRAI) for concluding reference interconnection offers (RIOs).
RIOs refer to the commercial agreements between the broadcasters and MSOs, which beam the channels to local cable operators.
The deals has to happen soon in order to meet the October 31 schedule for a shift from analog to digital cable system in the four metros.
With only a couple of operators making any headway in signing the RIOs, Trai may now have to set a new deadline.
Last week, Wire and Wireless (WWIL) said it has signed digital addressable system interconnect arrangements with Mediapro Enterprises for about 70 channels.
Anil Malhotra, chief operating officer, WWIL, said, “We are in continuous discussions with other broadcasters to finalise the commercial arrangements. In fact, I am sitting with a major broadcaster and working out the structure as we speak,” he said.
Hathway Cable & Datacom Ltd said majority of its reference interconnection offer (RIOs) with broadcasters have been completed a few days ago. “A few still remain to be sealed. We have broadly thought about what will be the packaging like and have come up with three pay tier categories — basic, middle and premium,” said a senior company official.
Uday Shankar, president, Indian Broadcasting Federation, was not available for comments as calls made on his cell phone remained unanswered.
With the digitisation deadline looming, MSOs said they are keen on closing the deals with broadcasters and moving on with the packaging of their various plans to be offered to the subscribers.
A related part of the RIO is carriage fees that the cable TV operators will charge the broadcasters to distribute their channels on their networks. This would eventually determine the retail price consumers would pay for watching these channels.
Rahul Kundnani, research analyst-institutional equities - media & retail, Sbicap Securities Ltd, said, “Both the parties are engaged in long-drawn bargaining as the settled pricing terms will largely determine the content cost of MSOs and the subscription revenue of broadcasters in digitised India.”
Multi-system operators (MSOs) and television broadcasters have missed the August 21 deadline set by the Telecom Regulatory Authority of India (TRAI) for concluding reference interconnection offers (RIOs).
RIOs refer to the commercial agreements between the broadcasters and MSOs, which beam the channels to local cable operators.
The deals has to happen soon in order to meet the October 31 schedule for a shift from analog to digital cable system in the four metros.
With only a couple of operators making any headway in signing the RIOs, Trai may now have to set a new deadline.
Last week, Wire and Wireless (WWIL) said it has signed digital addressable system interconnect arrangements with Mediapro Enterprises for about 70 channels.
Anil Malhotra, chief operating officer, WWIL, said, “We are in continuous discussions with other broadcasters to finalise the commercial arrangements. In fact, I am sitting with a major broadcaster and working out the structure as we speak,” he said.
Hathway Cable & Datacom Ltd said majority of its reference interconnection offer (RIOs) with broadcasters have been completed a few days ago. “A few still remain to be sealed. We have broadly thought about what will be the packaging like and have come up with three pay tier categories — basic, middle and premium,” said a senior company official.
Uday Shankar, president, Indian Broadcasting Federation, was not available for comments as calls made on his cell phone remained unanswered.
With the digitisation deadline looming, MSOs said they are keen on closing the deals with broadcasters and moving on with the packaging of their various plans to be offered to the subscribers.
A related part of the RIO is carriage fees that the cable TV operators will charge the broadcasters to distribute their channels on their networks. This would eventually determine the retail price consumers would pay for watching these channels.
Rahul Kundnani, research analyst-institutional equities - media & retail, Sbicap Securities Ltd, said, “Both the parties are engaged in long-drawn bargaining as the settled pricing terms will largely determine the content cost of MSOs and the subscription revenue of broadcasters in digitised India.”
Ashok Mansukhani, president - MSO Alliance (a representative body of the Indian cable industry) and whole-time director of Hinduja Ventures, said the timeline set by the regulator should be viewed as an indicative date and not as writing on the stone.
“Some operators have already signed RIOs while others are in advanced stages of discussion. The committee has been updated with the progress in this regard as of August 21, and I am sure things will fall in place shortly,” said Mansukhani, stressing that the timeline was communicated by Trai on August 9.
Meanwhile the inconclusive commercial agreements between MSOs and broadcasters has resulted into slow off-take of set-top boxes (STBs) as cable operators have not been able to create channel packages and pricing structures. Ironically, it was the low STB penetration that had led the government to extend the digitisation deadline by four months.
The Information & Broadcasting ministry had earlier said that Mumbai looked the most prepared with 50% of cable TV homes already having digital STB installations. However, Delhi and Kolkata were struggling with the rate of STB installations around 25% while Chennai was way behind.
A study by research firm TAM in May 2012 to capture the changing digitisation scenario in four metros found that Mumbai was leading in terms digital penetration at 33% followed by Kolkata, Delhi and Chennai at 25%, 24% and 20%, respectively.
“Some operators have already signed RIOs while others are in advanced stages of discussion. The committee has been updated with the progress in this regard as of August 21, and I am sure things will fall in place shortly,” said Mansukhani, stressing that the timeline was communicated by Trai on August 9.
Meanwhile the inconclusive commercial agreements between MSOs and broadcasters has resulted into slow off-take of set-top boxes (STBs) as cable operators have not been able to create channel packages and pricing structures. Ironically, it was the low STB penetration that had led the government to extend the digitisation deadline by four months.
The Information & Broadcasting ministry had earlier said that Mumbai looked the most prepared with 50% of cable TV homes already having digital STB installations. However, Delhi and Kolkata were struggling with the rate of STB installations around 25% while Chennai was way behind.
A study by research firm TAM in May 2012 to capture the changing digitisation scenario in four metros found that Mumbai was leading in terms digital penetration at 33% followed by Kolkata, Delhi and Chennai at 25%, 24% and 20%, respectively.
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