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MSOs find Star’s incentive-driven RIO schemes economically unviable

MUMBAI: Multi-system operators (MSOs) have decided to go with Star India’s original reference interconnect offer (RIO). They are not in favour of the amended RIO that was issued by Star on Monday as they found it to be economically unviable.

The decision was taken at the first meeting of the newly formed All India Digital Cable Federation (AIDCF) in Delhi. The meeting was attended by Sameer Manchanda (DEN Networks), Viren Raheja (Hathway Cable & Datacom), Tony D’Silva (IMCL), Gurdeep Singh (Fastway Cable) and V.D. Wadhwa (Siti Cable), among others.

The MSOs have for the first time closed ranks on a significant issue and have spoken in one voice. The AIDCF, which has replaced the now defunct MSO Alliance, is leading that change.

vd-wadhwa-siti-cable“All of us have decided that we will go on a la carte for Star channels effective 10 November. We feel that in a digitised world, this is a great opportunity to become a B2C company. It was a collective decision by the industry,” AIDCF president V.D. Wadhwa told TelevisionPost.com.

The main agenda of the meeting was to discuss the incentive scheme offered by Star India in its amended RIO agreement. The meeting was held against the backdrop of the Telecom Disputes Settlement and Appellate Tribunal’s (TDSAT) order asking all MSOs to put Star channels on RIO from 10 November.

“In today’s meeting, we discussed the Star RIO offer, how to monetise it and its possible impact on the industry,” Wadhwa added.

So why did the MSOs not accept Star’s amended RIO? “If we take the Star offer, which they have posted on the website and which they have given individually to us, then even at peak discounts our payout will go up by about 100 per cent. It will be just double of what we were paying earlier,” Wadhwa explained.

He was also upfront that the MSOs do not have much to gain from the incentive scheme offered by Star and therefore going on RIO was the best option available before them.
As per the amended RIO issued by Star, the MSOs would be eligible for incentives based on the number of Star channels carried, the number of viewers and the ease of access to these channels.

The AIDCF is, however, keeping the door open for negotiation and has formed a sub-committee that will liaise with the Star management for further negotiation. The sub-committee will meet Star team early next week.

“We will share our apprehensions and our issues with Star management. We have formed a sub-committee to convey our decision in case Star can re-bundle it or can come out with some other solution so that it doesn’t disturb the business model for MSO. The sub-committee will take up the matter with Star between today and 10 November,” Wadhwa stated.

Another pertinent issue discussed at the meeting was whether the MSOs were technically well equipped to implement RIO.

“Technically, how do we implement a la carte? Whether to downgrade or upgrade the channels? So it is a technological challenge that we have to handle. This is another issue that we are struggling to deal with,” Wadhwa contended.

Echoing the view of his industry colleagues, he said that RIO is the future of the pay TV industry. “Going forward also, this makes better sense because digitisation will allow consumers to watch whichever channel they want to watch, so as a platform we will offer only those channels that the consumers want,” he asserted.

“Even though there will be some teething problems in the first one or two months, in the long run it is a good arrangement for the entire industry,” he further stated.

Wadhwa also said that the MSOs are yet to decide on reworking package rates.