Trai looks to fully digitize cable networks in India in five years

Trai looks to fully digitize cable networks in India in five years
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First Published: Wed, Jul 16 2008. 12 16 AM IST

Updated: Wed, Jul 16 2008. 12 16 AM IST
New Delhi: Nearly two decades after cable transmission was first introduced in India, the first step towards comprehensively regulating an industry that has grown to serve 78 million households, has been made.
The Telecom Regulatory Authority of India (Trai), which also regulates the broadcast sector, made wide-ranging draft recommendations with an emphasis on digitization, new generation networks, quality of service and accountability.
The most important impact of these recommendations, if they are approved by India’s ministry of information and broadcasting, will be that cable networks in India will be fully digitized in five years.
This will allow transmission of a greater number of channels with better quality images, and also enable Internet and other value-added services on cable. According to industry estimates, more than 92% of cable homes in India are on analog cable.
These recommendations could potentially impact an estimated 78 million cable homes, 60,000 local cable operators, nearly 1,000 state-level independent cable operators and 10 national multi-system operators. Most industry players applauded the recommendations, saying implementation of the new regulatory regime will help the sector become organized and attract institutional financing.
Trai has introduced a system of licensing for both local cable operators (LCOs) and multi-system operators (MSOs), departing from the present system of registration at the local post office.
Surging ahead: Nripendra Misra, chairman of the Telecom Regulatory Authority of India, which has made significant recommendations that may change the face of cable broadcast in the years to come. (Ramesh Pathania / Mint)
It has defined the basic service area as the revenue district and while LCOs can obtain district- and state-level licences, MSOs can apply for district-level, state-level and countrywide licences. Licensing authority for LCOs will be the senior superintendent of post offices at the district level and chief post master general for state-level licences. MSOs will be granted licences directly from the ministry of information and broadcasting, or a designated agency under it. There is no restriction on the number of licences that can be granted in any service area.
A licence is valid for five years and entry fee ranging from Rs10,000 to Rs25 lakh has been prescribed for various players depending on the service area.
Trai recommended that digitization of networks of both LCOs and MSOs be mandated within five years for incumbents and three years for new players. Existing players have to migrate to the new system within one year of notification of the new regime. A person applying for an LCO or an MSO licence must produce an affidavit proving that he has not been convicted in a criminal case. This is seen as a response to occasionally violent turf wars that have come to be associated with the sector.
The recommendations place enormous focus on quality of service, customer grievance redressal and addressability, with the agency mandating maintenance of detailed records of customer base and complaints as well as transparency in billing and contracts between MSOs and cable operators.
Trai also recommended that various local and state governments give right of way to licensed cable operators for laying of cables.
“We have made these recommendations keeping in mind three goals: help the cable industry compete with emerging digital platforms, encourage investment in the sector so that infrastructure can be upgraded and convergence, so that broadband and other value-added services can also be provided by the cable operator,” said Trai chairman Nripendra Misra.
Roop Sharma, president of the Cable Operators Federation of India, an industry body representing last mile operators, welcomed the recommendations. “The sector will get industry status with this and cable operators will be able to get loans from banks and also attract investment. Trai had earlier recommended a foreign direct investment limit of 74% in cable networks.
Ashok Mansukhani, president of the MSO Alliance, an industry body representing large national MSOs, said the recommendations are not ambitious enough. “Five years is too long for digitization. Also, Trai hasn’t made courageous steps towards verifying the actual subscriber base.”
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First Published: Wed, Jul 16 2008. 12 16 AM IST
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