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Multi system
operators (MSOs), distributors and independent cable operators have
drafted a code of conduct to formulate a common pricing for subscribers
and franchisees in an initiative that could change the way the industry
operates if implemented.
Cable pricing
for the subscribers would be in the range of Rs 200 to Rs 350 per
connection a month, according to a preliminary agreement in Mumbai.
Distributors of the MSOs will have to take the responsibility of
driving local cable operators to collect subscriptions in this range,
depending on the area. The decision was taken recently at a meeting
in Mumbai among MSOs like INCablenet, Hathway Cable & Datacom,
SitiCable and Win Cable. The uniform franchisee fee charged by the
MSO would be Rs 100 a subscriber per month. Incidentally, MSOs were
undercutting prices to expand their cable network and the franchisee
fees were as low as Rs 30. “The move is to reduce unnecessary
price cutting due to intense competition among the MSOs,” a
source said. Another significant recommendation was that no new
headend should be allowed to be set up by a breakway operator. For
implementing this, the MSOs will need support from the broadcasters
besides remaining united amongst themselves.
The MSOs and
the broadcasters are meeting at Delhi for this purpose. “If
the MSO disconnects an operator, no new head-end should be allowed
to come up,” said the source. No MSO should poach operators
from the rival networks, the code of conduct said. Only unity among
the MSOs can provide them leverage to fight against the steep price
hikes by pay-TV channels. Any breach of conduct would be referred
to the disciplinary committee. The MSOs want the broadcasters to
be involved in the committee, without whose support the ground distribution
situation would not improve. The unity in Mumbai would be extended
to other places. The distributors of the MSOs and the local cable
operators would be under pressure to increase connectivity and enhance
the rates. “Competition among MSOs used to suit the distributors
and the local cable operators as these areas were neglected. The
low pricing also favoured a fast growth in cable TV penetration.
Now it will be hard on all of us to generate more money from the
system,” said the distributor of a leading MSO.
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