TRAI Favours Cable Operators: Says No To Fix Minimum Net Worth For Registration

The Telecom Regulatory Authority of India (TRAI) has recently said that there is no need for fixing a minimum net worth for registration of multiple-system operators in cable TV service. It has recommended that any individual, company, corporate firm or LLP that fulfills provisions of the Cable TV Rules, may be granted Multi-System Operator (MSO) registration.

TRAI made its recommendation on the issue after the Ministry of Information and Broadcasting had sought its recommendations on setting an entry-level net-worth criterion for MSOs across the country.

TRAI said, "From the point of plurality and diversity of content the regional MSOs are necessary for the cable TV sector as they can better provide the program diversity to cater to the regional/local tastes. A minimum net-worth criterion or entry could discourage the growth of smaller MSOs in far-flung areas and in-turn may hinder the incubation and growth of local and regional channels."
Thus, an entry barrier like fixing a minimum net-worth requirement may adversely affect overall regional content, it added.

More Than 1,000 Operational MSOs In India

According to the data issued by TRAI, there are more than 1100 active MSOs across the country. More than five hundred such MSOs have a subscriber base less than 2500.

TRAI believes that fixing net-worth based on network cost will not create any "identifiable" benefit or enable the growth of the sector. "Such criteria may rather impinge upon the free entrepreneurial spirit of the last-mile player and may affect the business adversely," it added.

For the unaware, cable television came into existence in India in 1983 when Doordarshan started its services on cable networks in rural areas of Rajasthan. During the 1990s, the cable and satellite TV broadcast business was largely driven by small Cable TV operators. But a phenomenal increase in several TV channels from the year 2000 until 2010 resulted in operational constraints for LCOs. During this period, MSO came into existence.

MSOs established head-ends in metros and major towns to receive TV signals from different TV broadcasters, aggregate and distribute these signals to LCOs.