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MSOs, LCOs have to work together to increase ARPUs in Patna

PATNA: The Patna session of TelevisionPost.com’s digital initiative, GroundPost, saw cable TV executives come together to discuss the issues and chalk out solutions. During a panel discussion on ‘Dynamics of Patna and adjoining markets’, representatives of the three multi-system operators (MSOs) and the local cable operator (LCO) community foregathered to present their views.

GTPL regional director Amitabh Singh Rana said that the biggest issue is that the business model is dependent on both MSOs and LCOs. “The LCOs form an important link between the MSOs and the consumers. If there are issues between the MSOs and LCOs, the consumers will face problems and will ultimately go somewhere else.”

He added that while cable wars have stopped and there is understanding among the MSOs on the ground, the ARPU is not increasing. “Until there is a hike in the consumer ARPU, the business model won’t work,” he summarised.

Siti Cable’s Nitin Mehra added that the goal should be to increase on-the-ground collection. “Customer ARPU has to increase. MSOs and LCOs have to join hands and work together. Broadcasters’ demands have increased, but we can’t boycott them. We need to talk and resolve the issues,” he noted.

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Mehra said that the second big issue is taxation. “Our committee should send representatives to the ministry to make them aware of tax issues. It’s a big issue.”

Darsh Digital vice president Om Prakash Choudhary said that the whole business is broadly separated into services and consumption. MSOs and LCOs together are providing services to the consumers, but money is not coming in due to a lack of consensus.

“While at one end the consumer is enjoying the services, on other end the service providers are locking horns with themselves. It’s time for all of us to join hands and charge the consumer for the actual value of our services,” Choudhary said.

He added that if three MSOs can sort out their differences, then 300 LCOs can as well, even if it takes some more time.

Agreeing with Choudhary and Rana, Darsh Digital vice president Anjani Kumar Singh noted that while 1 April was the deadline for Phase II digitisation, in Patna, the analogue signals were switched off on 5 June. “Only 5–10 per cent boxes had been seeded in Patna by that time. Thanks to the joint effort by the LCOs, after 5 June we achieved almost 100 per cent digitisation,” he said.

However, Singh added that the problem now concerns the strategy to sustain in the digitised environment. “Till the three parties [broadcasters, MSOs and LCOs] come together, the right business model will not be formed. Without the cooperation and support of the LCOs, billing and packaging cannot be implemented successfully on the ground,” he said.

Giving the perspective of an LCO, Prasoon Kumar said that the cable industry is now 22 years old, and he ran service with Rs 50 per month, or even for free, always with the backing of the MSOs. “We LCOs are like those soldiers who will work wherever you [MSOs] want us to. But we need your backing too.”

Talking about HD, broadband and other value-added services, Mehra said that technology is changing very fast, and it’s not about survival but providing better services to the consumer. “We may not be able to provide VAS now, but if we start now, in some time we will be able to.”

Singh also agreed that once ARPU increases, MSOs will start providing other value-added services.

However, there is also a need to understand the consumer. Choudhary said that there is customer acquisition and then there is cultivation. “Now that we have acquired the customer, we should categorise them and understand them better. We need to know which customers will use only basic services and which may opt for broadband and other VAS. The problem is the mindset—the consumer thinks cable is for Rs 100. That has to change.”

Siti Maurya director Madanjeet Kumar is hopeful. “20 years back, we used to collect Rs 200. We later reduced it to Rs 100 and even Rs 50 per month. Now we have started taking the ARPU to Rs 200. It will slowly go up to Rs 300.”

While there is a truce existing between the three MSOs, DEN is looking to enter the market, which many operators feel may spoil the market.

While Rana felt that even if a new player comes, it can delay the process of digitisation but can’t derail it, Mehra said that whoever comes to the market should not try to land grab by ‘undercutting the rates’.