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Four leading
cable operators, the Hinduja-owned Incable Net, the Rupert Murdoch-controlled
Star India’s Hathway Cable & Datacom and Wincable and Subhash
Chandra’s Zee Telefilm’s Siticable, have come together
on a common platform and have decided to charge local cable operators
a higher fee. According to industry sources, they have decided to
evolve a common pricing mechanism and formulate a standard code
of conduct after meeting last week in Mumbai. Their decision will
apply across the country and marks an end to the fierce price wars
that plagued the industry.
The big four
cable companies have also agreed to sign a no-poaching agreement.
In essence, this means that they will not enter each other’s
turf. According to cable industry sources, the move is aimed at
reducing unnecessary price undercutting owing to intense competition
and will ensure transparency and bring about a systematic growth
of the cable industry. According to sources, the average cable price
for subscriber would be in the range Rs 200-350 per cable household,
almost double the present level of Rs 100-150 per subscriber. The
rate will, however, will depend on the area and the paying capacity
of subscribers. The cable TV companies have also decided that the
franchisee fee (paid by the local cable operator) will be at least
Rs 100 a month per subscriber serviced by the franchisee cable operator,
up from the current Rs 30 to Rs 80. The fee is paid to the cable
TV company for providing the feed and physical infrastructure.
Star India and
Zee Telefilms will benefit a great deal out of this. Star India
has a 26 per cent stake in Hathway Cable and Datacom and also has
significant interest in Wincable, while Siticable is a wholly owned
subsidiary of Zee Telefilms. With the cable TV companies now coming
together, local cable operators will be forced to declare higher
subscriber connections than they now do.
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