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GroundPost: Problem with DAS is that it got implemented in reverse order
SOLAPUR: The deadlock over consumer billing continues and the only way digital addressable system (DAS) can be successfully implemented is by ironing out issues over revenue share between multi-system operators (MSOs) and the local cable operators (LCOs), panellists said at the inaugural cable TV conclave GroundPost in Solapur.
Siti Cable COO Anil Malhotra said that DAS was implemented in reverse order with set-top boxes (STBs) being seeded first, followed by customer application form (CAF) collection, signing agreement with LMOs and raising bills on the end consumers.
“We should have signed agreements first. This should have been followed by revenue share arrangement with LMOs, collecting subscriber info, seeding STBs and raising invoices. That should have been the process but the industry took the reverse route,” stated Malhotra during a panel discussion on ‘Digitisation – Ground Issues’.
He also urged the LMOs to sit across the table and sort out pending issues like revenue share. “We have resolved 80–90 per cent of issues and the remaining 10 per cent should also be resolved soon,” he added.
Responding to Malhotra, Maharashtra Cable Operators Federation (MCOF) president Arvind Prabhoo said that the MSOs implemented DAS the way it suited them. “The MSOs thought that once they seeded their STBs, the LMOs would be in their control. It was done by design and not by default,” Prabhoo alleged.
On the dispute between MSOs and LMOs, Prabhoo said that the signing of inter-connect agreement is the solution to all disputes, in particular the revenue share issue.
He also outlined that interconnect agreement, revenue share and packaging are the main issues that need to be resolved soon.
Bhima Riddhi Digital Services (BRDS) director Nagesh Chhabria said that packaging is the main bone of contention. “The LMOs don’t have the confidence to start packaging. There needs to be a mutual agreement between MSOs and LMOs to start packaging,” Chhabria expressed.
While agreeing that there was a grey area in the regulation that allows MSOs to relegate the responsibility of billing to consumers to the LMOs, Siti Cable’s Malhotra asserted that this responsibility currently lies with the MSOs.
“Allowing LMOs to bill customers is not simple as the bill will be generated from the MSOs’ systems. In case there is a mistake, whose responsibility would that be?” Malhotra said.
Prabhoo countered by saying that the MSOs must allow LMOs to generate bill by allowing limited access to their subscriber management system (SMS). “Hathway had almost agreed to that arrangement in principal. The ownership of the customer has to be established,” he averred.
Chhabria said that the survival of MSOs is dependent on the survival of LMOs. He also pointed out that the MSOs have been surviving on carriage revenue that mainly comes from metro markets.
While stating that most MSOs are under financial duress, Malhotra said that the MSOs need to move to the subscription-based model at the earliest as carriage income will taper down further.
Learning from Phases I and II of DAS
Participating in another panel discussion on ‘Learning from Phases I and II of DAS’, Chhabria said that the MSOs should have invested more time in educating the LMOs. He also added that nobody in the industry thought that DAS would be implemented within the deadline as there was lot confusion.
“It took six months to encrypt the STBs as no one was sure that there was a question mark over DAS implementation,” he noted.
Agreeing with Chhabria, Prabhoo said that there was a communication gap between the MSOs and the LMOs as the former never consulted the latter. “The MSOs should have been proactive to educate the LMOs on things like technology and business model. The LMOs should have been taken into confidence by taking them along in the planning stages,” he said.
IndiaCast EVP Amit Arora said that the three stakeholders—broadcaster, MSO and LMO—need to empathise with each other and work together to grow average revenue per user (ARPU).
Chhabria also said that the MSOs made a grievous mistake by subsidising STBs in Phase I cities where customers are willing to pay. “The MSOs wanted to gain market share and that is the reason why they subsidised STBs,” he pointed out.
The discussion then veered to the role of distributors in the DAS regime. Prabhoo said that distributors have less relevance in the DAS regime as MSOs and LMOs can interact directly.
Echoing him, Chhabria said that distributors are a metro phenomenon. “The role of distributors has marginalised but to what extent they will be used depends on their equation with the LMOs,” he stated.
Prabhoo said that the industry was still functioning with an analogue mindset. The need of the hour is to have a digital mindset.