Broadcasters' business plans stalled by pending policies
(07 aug '08 ; 6.00 . pm)

No forward movement on a number of key policy initiatives pending at the Ministry of Information and Broadcasting (I&B) is affecting the business plans of a large number of broadcasters, direct-to-home (DTH) operators and cable companies.

While the officials at the I&B ministry say work is under progress on a number of such issues, executives of media companies say otherwise.

The key issues among these include a four percentage point reduction in annual revenue sharing formula for DTH operators with the government, green signal to the Headend-in-the-Sky (HITS) cable distribution platform, approval of 150 pending applications for new television channels, third-phase rollout of private FM radio, 55-city rollout of CAS and the interoperability of DTH set-top boxes between MPEG-2 and MPEG-4, among others.

The expansion of Conditional Access System (CAS) in three metros — Delhi, Mumbai and Kolkata — and subsequent rollout in 55 cities, as recommended by the Telecom Regulatory Authority of India (Trai), has been pending for over a year now.

“Investors are waiting to put in a large amount of money towards the digitisation of cable distribution platform in several key cities. But there is practically no forward movement on the CAS rollout that will mandatorily enforce the digitisation of the cable companies,” says a senior executive with a leading cable distribution company.

“The matter requires consultation with all the parties, including the various state governments, hence it is bound to take time,” a senior I&B official said recently.

However, industry sources say there has not been any formal meeting on CAS-related issue in the last 3-4 months.

Similarly, the issue of reduction in the annual revenue sharing formula between the DTH operators and the government is pending neccessary clearance. According to the formula, the DTH operators have to share 10 per cent of their annual revenue with the government. However, this will now be reduced to 6 per cent according to the Trai recommendation, which was also accepted by the I&B ministry a few months back, sources say.

“But there is no announcement to this affect so far from the ministry,” says a senior executive of a DTH company. The reduction in revenue sharing is proposed in line with the prevailing formula in the case of telecom companies, sources say.

The HITS rollout plan of Wire & Wireless India Ltd (WWIL) is also on hold as the I&B ministry is yet to issue a directive to the broadcasters asking them to share their channels with the HITS operator.

“Even the broadcast tribunal TDSAT, in its recent order, had asked the I&B ministry to issue clear instructions to the broadcasters asking them to share their channels with HITS operators. We are waiting to hear from the I&B ministry,” an Essel group executive said.

On the status of new applications for channels, a recent statement from the I&B ministry says over 150 applications are pending approval in the ministry, while so far about 400 channels have been allowed to operate in the country.

“Several leading broadcasters have made public announcements of launching their news channels including the National Geographic Channel, Discovery India, and several news and entertainment channels, but even after filing the necessary application with the I&B ministry, there is a considerable amount of delay in issuing the new licences,” an industry source said.

Besides, the third phase rollout of private FM radio channels has been pending with the ministry for over six months now, industry sources say. “We have not heard from the I&B ministry on whether the 90-odd remaining vacant FM stations in the second phase will be put on auction or added to the third phase,” says a senior executive in AROI, the apex body of private radio companies.

 

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