Arasu Cable TV Corporation’s FY19 revenue expected to be Rs 268.89 cr

MUMBAI: State government-owned multi system operator (MSO) Tamil Nadu Arasu Cable TV Corporation (TACTV) is expecting its revenue for the financial year 2018-19 to be Rs 268.89 crore.

During the FY2017-18, TACTV had earned revenue of Rs. 221.90 crore with a net loss of Rs. 35.63 crore. The net loss was due to the purchase of set top boxes (STBs) and depreciation on the value of STBs.

Due to digitalisation of Cable TV and distribution of STBs, TACTV had purchased 36.40 Lakh STBs for Rs.612.21 crore on supplier line of credit model.

In its policy note for FY19-20, Tamil Nadu’s Information Technology (IT) department has stated that TACTV is facing paucity of funds to meet the repayment schedule and also expenditure relating to broadcasting due to the heavy investment on procurement of STBs.

So far, 34.51 lakh STBs have been distributed to the consumers through 16,907 local cable operators (LCOs). Further, HD STBs have been distributed to 18,253 subscribers through 2154 LCOs. The HD cable TV services are now available in 12 locations in the State.

The policy note further stated that TACTV has repaid Rs. 186 crore to the vendor as on 31st March 2019 from the revenue generation.

Since there is an accumulated cash flow deficit on account of purchase of STBs, TACTV has proposed to get a loan of Rs. 100 crore during the FY20 with a government guarantee.

TACTV had floated a global tender on 6th May 2017 for procurement of 60 lakh Standard Definition STBs and 10 Lakh High Definition STBs. Two successful Bidders were selected and Letter of Acceptance (LoA) issued for procurement of 60 Lakh SD STBs and 10 Lakh HD STBs.

During FY20, TACTV intends to increase its subscriber base and revenue in the upcoming years by optimizing the cost of bandwidth through Tamil Nadu FibreNet Corporation Limited (TANFINET) infrastructure and also by introducing the advanced technology of STBs.

As far as the implementation of the new Tariff order of TRAI is concerned, TACTV has allowed a maximum of Rs. 130+GST as Network Capacity Fee (NCF) per subscriber for 100 Free-to-air Channels (FTA) and Rs. 20+GST for every additional 25 Channels.

However, TACTV, in order to achieve the objective of providing the digital Cable TV service at an affordable cost, has fixed the NCF as Rs. 120+GST for 142 FTA channels and the Pay Channels are provided at the rates published by the broadcasters as per the channels chosen by the subscribers.

Under the new Tariff order, TRAI has recommended a revenue sharing between TACTV and LCO in the ratio of 55:45 of NCF. However, considering the livelihood of the LCOs, TACTV gives 65% of NCF to them.

Further, additional incentive up to 6% of NCF is also given to LCOs based on their performance in digital distribution. TRAI has fixed 20% of the MRP of pay channels declared by Broadcastersas Distribution Fee and the same is shared by TACTV and LCO in the ratio of 50:50, the policy note stated.

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