While the Cable TV Networks Bill addresses most of the industry’s demand, some niggling issues like carriage fee, double levies by entertainment and service tax departments and others still hound the industry. However, Jawahar Goel, managing director, Dish TV India Ltd, told DNA he was optimistic that the government’s move to digitise cable TV will not only improve efficiency but also boost volumes. Excerpts from the interview:
Has the recent Cable TV Networks Bill passed by the parliament taken care of all the needs of DTH cable operators?
If I give the industry perspective, then since the time cable TV business started in 1993-94 with the multi-system operator (MSO) model in the country, there are ten stakeholders. Broadcasters, which are in two categories — pay and free-to-air — have different business models. These newer free-to-air broadcasters are the ones struggling to survive. Their main concern is the carriage fee they pay to the cable operators.
What percentage is this carriage charge of the total cost?
Last year it was Rs2,000 crore.
How much does it work out in percentage terms?
For some, it is 70% of the cost; for others it is 10%. So it depends on the broadcaster but carriage fee is a different story.
The government has done away with it?
Why? It (carriage fee) is of interest to everybody. On the broadcasting side also, there is a distribution team. Where will they go? They would like the carriage fee to stay, so they are retained in the organisation. Nobody wants to be retrenched.
How does it impact the end-subscriber?
End-subscribers don’t know all these things. If you take the industry perspective (for the Cable TV Networks Bill), besides the broadcasters and MSOs, there are local cable TV operators (LCOs), consumers, state government, central government and the tax authority. In total, there are ten stakeholders. In the process, there is always a push and pull. There is also a certain amount of opaqueness in relationship between them and wherever there is opaqueness there is always conflict, tussle and tension.
Why is the government going in for the digitisation of cable TV?
At the international level they have been taking a decision to digitise TV because analogue TV consumes more power. Secondly, analogue mode also does not have enough capacity to carry more content. In India, the government is downlinking to over 600 channels and there must be more than 100 applications pending. Then there are another 80-90 applications for uplinking. They too will obviously need downlinking. So, if we presume that the speed of new channel opening will remain the same as it was in the last 3-4 years on a year-on-year basis, then by 2015 the number will rise to 1,000-odd channels. In analog cable, you can carry only 60-70 channels. After digitisation, you can carry more than that. It will also help in improving tax compliance in the industry. Our industry is the only one which is being levied taxes by both the entertainment-tax and service-tax departments. While there is total compliance by the DTH cable operators, it is very low among other cable operators. Now with digitisation, when you can count each and every home getting the service, revenues will flow to the respective partner (tax authorities.
How has the government responded to your grievance on being burdened by entertainment and service taxes?
The issue was raised with the central government. We had a meeting — once in two years there is an information minister conference in Vigyan Bhavan — last year. The resolution was passed that the state government will go easy on the entertainment tax. Thankfully, the only state which has followed that is the Congress-ruled Rajasthan. When we approach the finance ministry, they say you pray and help us roll out the GST. Once GST happens, everything will become smooth. Now, GST is a mammoth task because of the issues between the ruling party and the opposition, and industry players like us are caught in their fight.
Do you think the government will be able to meet the deadline set for completion of digitisation?
Unfortunately, the Bill cleared in the parliament is such that there is no provision that vests power with the MIB (ministry of information &broadcasting) to extend the date. If at all the circumstances are such (that we are not confident of finishing digitisation by 2013), then the MIB will have to go back the Parliament for extension of the date.
Is there a possibility of missing the deadline?
Even if the industry thinks that they will not be able to do it then the government or MIB has to go back to the parliament for extending the date. However, I believe, it will not be a tough task. There are so many entrepreneurs and over 50-60,000 cable operators. So, if there is a will they will be able to do it.
Are you disappointed with the decision of the committee of secretaries to turn down the industry demand for sops to promote digitisation of cable TV?
It was part of the package the cable industry had sought but I never expected it because in the current economic environment sops are going away. Most of the budget goes to the common man—the poorest of the poor.
Disclosure: Dish TV is part of the Zee Group, which is a promoter of Diligent Media Corporation that publishes the DNA
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