Active Stocks
Sat May 18 2024 12:49:03
  1. Tata Motors share price
  2. 952.95 0.76%
  1. Power Grid Corporation Of India share price
  2. 316.85 1.12%
  1. Tata Steel share price
  2. 167.90 0.39%
  1. ITC share price
  2. 436.50 -0.02%
  1. State Bank Of India share price
  2. 821.30 0.42%
Business News/ Opinion / Columns/  Trai on broadband via local cable: Too little, too late

Trai on broadband via local cable: Too little, too late

The cable TV industry has tremendous reach, deep into the urban and rural areas

Photo: MintPremium
Photo: Mint

Last week, the Telecom Regulatory Authority of India (Trai) recommendations on amending the rules under the Cable Television Networks (Regulation) Act to enable telecom broadband services, got very little attention both from media and industry stakeholders. Cable industry experts said the recommendations have come too late.

In its note, Trai said, globally, cable TV broadband (CATV) has become very popular as it is less expensive, quick to deploy, and easier to handle. “In India, the cable TV industry has tremendous reach, deep into urban and rural areas. Because of its affordability and ubiquity, cable broadband could be, for India, a super-fast highway for broadband communications for most homes and businesses in the foreseeable future," it said.

Trai, also in charge of broadcasting, has often been panned for inadequate understanding of this sector. Media industry experts maintain Trai’s push to promote broadband connections via local cable operators (LCOs) and asking them to enable their last mile infrastructure to be used by telecom services providers (TSPs), is off by a decade. “That ship has long sailed," said media and entertainment sector consultant Anuj Gandhi, referring to a large number of enterprising local cable operators already providing broadband services. “It’s not the large multi-system operators (MSOs) but the small last mile operators (LMOs) who are offering broadband in several localities, including in Mumbai, for instance," he said.

During the pandemic, when work-from-home became the norm and education moved online, it gave a fillip to broadband services. Indian consumers adopted Internet in a big way, Gandhi said. Wired Internet saw the maximum growth as reflected in Trai data, he said, though all broadband connections provided by cable operators may not be part of these numbers.

The last mile operators (LMOs) or local cable operators (LCOs) as they are called, buy bandwidth in bulk from companies that act as middlemen. They redistribute this to the end consumer with healthy margins.

“When Trai says provide your last mile infrastructure to telcos to deploy broadband, it’s not clear why a cable operator, who is making 60-70% margin, would agree to do so and become a reseller for a telco," Gandhi said.

Changing the Cable TV Act is unlikely to alter things on ground. However, Bombay High Court lawyer and cable industry expert Ashok Mansukhani feels the cable sector is well equipped to provide broadband services.

“The 1,761 multi system operators (MSOs) and their linked cable operators must gear up and provide high-speed broadband to the maximum number of their customers looking to the challenges of quick 5G penetration by both Reliance Jio and Bharati Airtel in 2023," Mansukhani said.

However, the cable industry, especially MSOs, has not paid enough attention to broadband deployment through their vast base.

“The expected record deployment of 5G by the two main TSPs will only increase their woes unless they rise to the occasion, especially in rural India. Another threat, satellite broadband , will emerge in the next two years, but that may be an urban phenomenon," he said.

“Cable operators may strive to provide last mile access to access service providers and internet service providers in a fair, transparent, and non-discriminatory manner for proliferation of broadband services," Trai said.

Mansukhani said Trai recommendation have unfortunately bypassed MSOs. “Trai in its anxiety to break open the doors to the vibrant cable industry, has completely ignored the seminal role of MSOs over the last 27 years in helping the cable industry to modernise and provide state-of-the-art digital services… to millions of subscribers through LCOs," he said.

LMOs control 97-98% of cable TV homes, with MSOs having direct access to only 2-3 %. “They will not sell out to TSPs as this is a business they have painstakingly built over the nearly 30 years with no support from the Government. This means that instead of buying out cable businesses, TSPs will have to enter into revenue share agreements with the LMOs through their MSOs to increase cable broadband deployment," he said.

Others said the recommendations are loosely drafted and offer no details on any revenue share arrangement between TSPs and LCOs.

Shuchi Bansal is Mint’s media, marketing and advertising editor. Ordinary Post will look at pressing issues related to all three. Or just fun stuff.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed - it's all here, just a click away! Login Now!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 15 Sep 2022, 12:50 AM IST
Next Story footLogo
Recommended For You