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HomeArticlesRoop Sharma‘Acche Din Aane Wale Hain’ (Good Times are here to Come)
Tuesday, 10 June 2014 13:26

‘Acche Din Aane Wale Hain’ (Good Times are here to Come)

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With the land slide victory of BJO lead by Narendra Modi, country awaits a coalition free strong and stable government. Broadcast Industry too expects to see some path-breaking decisions for the benefit of the nation rather than Ministry following an adhoc approach to benefit a few.  

The Bharatiya Janata Party (BJP) established a simple majority on its own in the Lok Sabha, according to election results on 16th May that gave the main opposition party more than five times as many seats as the ruling Congress buoying the stock markets and the rupee. The BJP, led by its prime ministerial candidate Narendra Modi, won the Lok Sabha elections, with 282 seats on its own. The alliance it leads National Democratic Alliance (NDA) has 336 seats in the lower house of the Parliament.

This is the highest number of seats won by any party on its own since the 1984 Lok Sabha elections, when the Congress, led by then Prime Minister Rajiv Gandhi won a landslide victory. Modi first acknowledged the people’s mandate with a tweet, and then a public rally in Vadodara. “Good times are coming,” said the BJP prime ministerial candidate, adding that “with all and development for all, will be my government’s motto and not an empty slogan” thus, continuing the development plan on which he contested the general elections.

If the BJP created one kind of history, then the Congress set another. The party set for its lowest tally in the Lok Sabha ever. Modi had predicted that the BJP would win the strongest popular mandate given to any party in 30 years. Investors cheered the voting trends. The rupee rallied to a 11-month high of 58.62 against its previous close of 59.29. The rupee has gained 4.85% against the dollar so far this year. The Sensex, India’s benchmark equity index, surged past the 25,000 mark for the first time to a record high, while Nifty scaled 7,500 points. The rupee opened at a 10-month high of 58.92 to a dollar. The National Stock Exchange’s India VIX, which indicates near-term market volatility, plunged 33.7% to 24.5675, hinting that the early leads were soothing investor sentiment.

As Narendra Modi took oath, the cable TV industry also started hoping to see its ‘achche din’. From the cable TV industry point of view, what one wants is relief from the faulty policies to implement digitization, that apart from adversely impacting the livelihood of lakhs of people in the industry are driving the whole industry in a state of uncertainty. A strong and stable economy that depends upon a government looking after the interests of all stake holders is the need of the day. A clear majority government is much required as there seems to be a paralysis for the last few years on decision making.  To that extent, whatever is good for the economy is good for the cable TV industry. There is a lot of hope from the new government after the utter failure of implementing Digitisation in cable TV industry in the last three years.  The feelers given by Mr Modi during his election campaign were that he would look after the interest of masses first and will encourage indigenous industry to come up. With his promise of eradicating corruption, have a zero tolerance on corruption, bring about probity and accountability in public life - to start with their own elected candidates and then among corporates, and avoid crony capitalism we expect things to fall in line for the growth of the industry.

The cable TV industry is enthused about the fact that there is a majority verdict in this election. It will hopefully mean a decisive government and faster movement on the regulatory front. This government will take office with the weight of a lot of expectations – including the expectations from the cable and satellite industry. Some of the important areas of the industry need immediate attention are given as under.: 

Manufacturing Industry : The most important Hardware required for Digitalisation and meant to be used with each TV set in the 100 million cable TV households in the country is a Set-Top-Box (STB) which is not manufactured in India. Most of the STBs are imported from China, which is reducing our Forex Reserves. Modi government should ensure that the Phase – III and IV of mandatory digitization involving seeding of more than 100 million STBs are only implemented when there is an adequate level of indigenous manufacturing of digital Set Top Box. This will ensure speedy repairs and maintenance and employment to lakhs of people.  To incentivize local manufacture, government should provide subsidy on the Excise and VAT and have stricter controls on quality and pricing of imported as well as local STBs. This subsidy in excise and VAT will certainly bring down the prices of indigenous STBs so that local manufacturers can compete with foreign companies. This can also enable them to export Indian equipment to other countries.

Rationalization of taxes : Industry has demanded rationalization of taxes as consumers in different states pay different price for the same content and variations in entertainment tax are very wide. Service Tax also adds an extra burden on consumers. These can be rationalized if cable TV service is considered an information service rather than entertainment. India's most ambitious indirect tax reform with GST would replace existing state and federal levies with a uniform tax, boosting revenue collection while cutting business transaction costs. GST, which could boost India's economy by up to two percentage points, has so far faced resistance from various states, including those governed by the BJP who fear a loss of their fiscal powers.

The BJP aims to address state concerns and implement GST in an "appropriate timeframe". The Congress party may back the reform in opposition, as it had initiated the same. The reform needs broad backing because it requires a change in the constitution.

Level playing field for all :  TRAI the industry regulator has to be immediately instructed to ensure a level playing field for all the stake holders in the distribution value chain with a prescribed revenue share arrangement on non discriminatory terms of doing business, to fix reasonable and affordable MRP price for the Pay TV channels that should benefit the consumers at large and to ensure that the Advertisement Cap for the pay TV channels is lowered to a maximum of 6 minutes in an hour while there Ad Cap of 10+2 minutes may be enforced for FTA (free to air) channels.

Financial Assistance and Incentives : At present there is no policy under which Loan can be granted to Cable Operators, even the 40% priority sector lending policy of Bank does not cover this industry. So we are expecting Modi government to frame such a policy which could grant loan to cable operators or bring such a policy, through which these operators can generate finance to invest for digital network infrastructure that can be used for providing converged services of broadband and television to consumers.  

LCOs Fundamental Rights to be protected : Fundamental Rights of LCOs are being infringed in the name of flawed regulations for digital cable in the excuse of public interest.  Main issues in this regards are:-

 I. Revenue Share : The revenue share as provided in TRAI regulations between MSOs and LCOs was based on mutual negotiations, which is not possible to succeed as MSOs by definition are also competitor of LCOs.  There is a fall back arrangement of giving 45% share of Basic Service Tier and 35% of pay channel revenue to LCOs but they feel that it is not sufficient to sustain their business as it may vary subscriber to subscriber and on the whims of an MSO. It is expected that the new government will relook at these policies and ensure a level playing field for all stake-holders.

II. Employment :  Cable TV industry is a large industry comprising of more than 100000 LCOs, 6000 MSOs, 800 TV Channels, TV Production houses, hundreds of small manufacturers and many small entrepreneurs providing various services to the stake holders of the industry. But due DAS implementation job security of most of these people has been jeopardized. Since Modi is very concerned about generating employment in the country, it is expected that before implementing rest of the phases of DAS, these issues will be examined and experience of first two phases of implementation will be used to decide on the future  DAS.

Cross Media Holding : Industry has demanded strict laws to be framed on Cross Media Holdings and to check Monopoly in the Cable TV industry, an issue that is pending since long and being unnecessarily delayed by the Ministry and TRAI. 

Regulation for Broadcasters & DTH operators : There is no law regulating the functions of DTH operators and Broadcasters. There are only guidelines that are flouted very often. At present only cable TV industry has the Cable TV Act to regulate it. Broadcast Bill that was to regulate the broadcasters including licensing, content and operations is pending to be cleared since 1997. Modi government is expected to revive this Bill and bring suitable regulations for broadcasters.

Control of Foreign channels and ‘Pay’ Channels :  India is the only country that treats the multinational foreign broadcasters at par with Indian broadcasters. They pay the same registration fee and follow the same guidelines for uplinking and downlinking. Also India is the only country where ‘Pay’ channels and FTA channels are treated at par. Industry expects that this should be taken seriously by the new government and regulations be framed to address the issue.  

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