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MIB says STB seeding low; TRAI asks broadcasters, MSOs to sign Phase III agreements by 30 April

MUMBAI: Even as the Ministry of Information and Broadcasting (MIB) has said that the seeding of set-top boxes (STBs) in Phase III has been very low, the Telecom Regulatory Authority of India (TRAI) has asked broadcasters and multi-system operators (MSOs) to get their act together for Phase III of digital addressable system (DAS) by signing interconnect agreements by 30 April.

The deadline for implementation of DAS in Phase III is 31 December 2015.

After hearing the MSOs and the broadcasters, TRAI asked the parties to fast-track the process of signing agreements. The authority asked the MSOs to approach the broadcasters within 15 days with their business plan. It also asked the broadcasters to respond to the MSOs within 15 days.

“We have asked the MSOs and broadcasters to sign agreements for DAS Phase III by 30 April. They need to start discussions at least so that they can come to some kind of an understanding by April end,” a TRAI official said on condition of anonymity.

The official also said that the authority would ask broadcasters to send a bi-monthly report on the requests they had received from the MSOs to receive their signals.

“This will indicate how many MSOs have actually approached the broadcasters to sign an agreement so that they don’t hide behind the excuse that broadcasters are not co-operating,” the official added.

The meeting was held under newly appointed TRAI principal advisor SK Gupta in place of N Parameswaran who is due to retire this year.

The MSOs had raised the issue of non-signing of agreements at the sixth meeting of DAS task force on 13 March, following which TRAI decided to convene a meeting of broadcasters and MSOs to understand their issues on 18 March.

The MSOs had contended that without the input cost, they would be unable to educate consumers about the rates.

3.1 mn STBs seeded by 37 MSOs in Phase III

During the task force meeting held on 13 March under the MIB additional secretary, the stakeholders were informed that data received from 37 out of 100 MSOs indicated that about 31 lakh (3.1 million) STBs had been seeded in Phase III, with about 5.5 lakh (0.55 million) boxes in their stock and about 23.5 lakh (2.35 million) under orders of purchase.

The additional secretary remarked that the seeding so far was very low as opposed to the target. He asked the representatives of the MSOs to apprise the task force of their strategies, plans and constraints in executing the same.

MSOs complain about content cost issues in Phases III and IV

The MSO representatives stated that there were issues of content costs, owing to which they were finding it difficult to plan digitisation in new areas.

Seeding plans, they said, could be firmed up only after knowing content cost. Until that time, the MSOs could only give their seeding projections instead of seeding plans, they said.

They also mentioned that revenue from Phase III and IV areas is about 20–30 per cent of the total revenue from the country, which is why the content cost in these areas cannot be same as that in Phase I and II areas.

The MSOs want the broadcasters to keep their ambitions under check until the seeding of STBs in Phase III areas.

The issue of local taxation levied by some state governments was also raised by the MSO representatives. They also pointed out that there were instances where local cable operators (LCOs) switched over to analogue when the digital signal to them was cut off by the MSO.

Broadcasters say MSOs have not approached them for content deals

The representatives of broadcasters told the task force that MSOs had not approached them for entering into interconnect agreements in new areas.

They also assured the task force that broadcasters were ready to cooperate as they did in Phases I and II. They said that the stage had not reached where agreements could be finalised.

They pointed out that seeding of STBs was done by MSOs in Phases I and II without first entering into interconnect agreements with broadcasters.

On the suggestions made by MSOs that broadcasters should not expect similar growth in subscription revenue vis-a-vis Phases I and II, the broadcasters contended that channel prices had gone up due to technical upgrading from SD to HD and that advertisement rates had not increased.

MIB awaits data on carriage fee and subscription rev data from IBF and NBA

Mentioning the lack of mutual understanding between broadcasters and MSOs, the chairperson suggested moving beyond these considerations to arrive at a consensus.

He also advised them to sit together and sort out the issues. He further added that the data on subscription revenue and carriage fee, which the Indian Broadcasting Foundation (IBF) and News Broadcasters Association (NBA) had in the last meeting assured to send to the ministry, was still awaited.

The TRAI representative mentioned that as per the TDSAT’s judgment in one case, MSO/LCO providing cable TV services was free to provide digital cable service in new areas unless it trespassed other areas.

A representative of a consumer forum mentioned that pricing was the main issue facing the consumers. He added that consumers should know the price before they switched to digital.

Indigenous STBs

The CEAMA representative stated that they approached as many MSOs as possible to clear their doubts about indigenous STBs; however, the response from the MSOs had not been encouraging. He reiterated that they had the capacity to meet the requirements of Phases III and IV.

The chairperson directed that in the format of the seeding plans sought from the MSOs, additional information on the number of indigenous STBs seeded and ordered by MSOs should also be sought.

He emphasised that there should be appreciable use of indigenous STBs also by the MSOs.

The representative of UP government mentioned that the MSOs should get the customer application form (CAF) filled by the customers before changing to digital mode in Phase III and IV areas.

He added that the state government was not having complete seeding data of Phase II cities. A J&K government representative wanted consumers to be informed about the STB price.

Awareness campaign needed

Concluding the meeting, the chairperson emphasised that progress would be slow without public awareness campaigns by the stakeholders.

He also maintained that broadcasters had to contribute by mounting awareness campaign on their channels as was done by them during Phases I and ll. Likewise, the MSOs should contribute to make this campaign successful.

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