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Jayalalithaa targets Sun’s cable business

Jayalalithaa targets Sun’s cable business
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First Published: Sat, Jun 04 2011. 01 15 AM IST
Updated: Sun, Jun 05 2011. 05 53 PM IST
Chennai: Tamil Nadu chief minister J. Jayalalithaa stepped up her campaign against the Maran brothers with her government planning to revive a state-run cable television network and apparently threatening a forcible takeover of the business, something that could be a direct threat to Kalanithi Maran’s media empire.
“There has been overwhelming demand for the immediate revival of (state-owned) Arasu Cable TV Corp. Ltd for providing cable TV services at reasonable rates,” governor Surjit Singh Barnala said in his speech outlining the new government’s plans. “This government will revive its activities in the public interest and nationalize the private cable TV operations in the state without affecting the interest of the last-mile local cable operators.”
The cable TV business in the state is dominated by Sumangali Cable Vision, a unit of Maran’s Sun TV Network Ltd.
Barnala’s address to the Tamil Nadu assembly also included the announcement of a corruption inquiry in the construction of the new state secretariat, a part of a series of measures aimed at the outgoing administration. Jayalalithaa has abandoned that Mount Road complex, to which government offices were in the process of shifting, for the old assembly building at Fort St. George.
Jayalalithaa has called for action against Dayanidhi Maran, currently Union textile minister, over media reports of wrongdoing in second-generation (2G) spectrum allocation when he was telecom minister. He is a member of the Dravida Munnetra Kazhagam (DMK)-led by M. Karunanidhi that lost to Jayalalithaa’s All India Anna Dravida Munnetra Kazhagam (AIADMK) in the recent election. The Marans are also closely related to Karunanidhi.
A Sun TV executive said there was no way the state government could take over or “nationalize” the cable business.
“Cable industry is a central government subject governed by Telecom Regulatory Authority of India (Trai)” V.C. Unnikrishnan, chief financial officer of Sun TV, said in a phone interview on Thursday, ahead of the governor’s announcement. “The state government cannot nationalize cable because it is a central subject.”
Sumangali Cable Vision’s Vittal Sampath Kumar was not immediately reachable over the phone.
The state government’s move may offer a second lease of life to Arasu, which was started three years ago by the DMK government when Karunanidhi was at loggerheads with the Marans. The government-supported network promised to be a cheaper alternative to subscribers but failed to take off as the Marans and Karunanidhi resolved their differences.
“More competition always helps,” said Timmy Kandhari, who leads PricewaterhouseCooper’s media and entertainment consulting arm in India. “People don’t shift (from one cable operator to another) overnight and if they do shift it will be at a much lower value. So who is going to sustain the losses?”
The governor said a retired high court judge will look into corruption allegations related to the new secretariat. The mammoth structure, with its manicured lawns on Chennai’s busy Mount Road, is estimated to have cost close to Rs1,000 crore.
“There have been allegations of excess and wasteful expenditure and deficiency in the standards of construction of the new secretariat building,” Barnala said. “Further work in the new secretariat complex will be stopped to facilitate this enquiry.”
anupama.c@livemint.com
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First Published: Sat, Jun 04 2011. 01 15 AM IST