New Delhi, September 29, 2004


“Most subscribers do not have option to change their cable operator and face frequent hike in subscription charges,” showed a survey done by a group of consumer organisations in the country, led by CUTS.

The survey findings reveal that 7 out of 10 households interviewed do not have option to change their cable operator, and 80% of these households faced a hike in subscription charges at least once in the last one-year. The survey is based on responses of more than 1500 representative respondents from the four metropolitan cities of Delhi, Mumbai, Kolkata and Chennai. It was done by CUTS in Delhi and Kolkata, CAG in Chennai and CGSI in Mumbai. The project was supported by the Ministry of Consumer Affairs, Government of India, under their consumer welfare fund.

“In an industry where there is a virtual monopoly at the consumers’ end, the survey identifies a crying need to regulate prices and ensure proper service standards at local level”, said Pradeep S Mehta, Secretary General of CUTS and Bharath Jairaj, Legal Coordinator of CAG, Chennai.

The Cable TV sector is a seller’s market and the consumer is merely a puppet in the hands of operators, having no say in the types of channels s/he wants to watch. Though 70% cable TV subscribers received more than 50 channels, most of these (83%) usually watch less than 15 channels. Thus consumers are made to pay for more than 35 channels, which they do not watch. “This is a clear example of restrictive trade practice being followed in the cable TV industry. The Conditional Access System (CAS) was supposed to address this anomaly, however, it has remained a non-starter except for Chennai and South Delhi, with its fate uncertain,” commented Manish Agarwal, Policy Analyst at CUTS.

Eighty percent households covered by the survey, pay between Rs.150-300 as monthly cable subscription charges: maximum respondents (38%) pay between Rs.150-200, followed by 24% paying between Rs.200-250 and 20% paying between Rs.250-300 per month. Importantly, there is not much difference in the subscription charges paid by consumers in lieu of the number of TV sets owned by them.

Kolkata with average monthly subscription charge of Rs.175 is the least expensive metro, followed by Chennai (Rs.187), Mumbai (Rs.247), and Delhi (Rs.253), as the most expensive.

Among key improvements, consumers would like in the cable TV system: better picture and audio quality, an effective complaint redressal system, and stopping of change in order of channels.

Since CAS was to be implemented in the four metros, the survey was initially aimed at assessing consumers’ perception on the operational efficiency of CAS and to assess whether CAS has addressed these inefficiencies and inequity. However, notification on CAS was withdrawn on recommendations of the Telecom Regulatory Authority of India (TRAI), designated regulatory agency for broadcasting and cable services. Given the status quo, survey was done in the four metros to:

assess the structure of cable TV market and level of influence cable operators have on consumers; and

identify the level of consumer awareness about CAS

The survey reveals that most respondents (96%) have heard of CAS. However, in terms of acceptance of the system, there is variation across metros. Majority of respondents in Delhi, Kolkata and Chennai are not in favour of accepting CAS and advance fear of increase in monthly rentals as the main reason for their response. On the other hand, majority of respondents in Mumbai, in particular those paying monthly subscription charge of Rs.200 and above favour CAS and expect that CAS would reduce the monthly rentals.

Post-CAS monthly rental is thus a chief reason for accepting/rejecting CAS. Keeping aside the variation in their perceptions, what emerges is that most respondents do not want an increase in their monthly cable bills, if CAS is implemented.

Moreover, variation in perception of respondents across metros regarding post-CAS monthly subscription charges highlights the poor awareness with respect to CAS. In fact, lack of information about different aspects of transition to the CAS regime has been one of the main reasons for failure of CAS in its first attempt.

“TRAI is soon going to come out with its recommendations on Cable TV services. Given the experience with implementation of CAS, it is imperative that whatever system is proposed by TRAI, there is full clarity and mass awareness of consumers, in order for any proposed system to succeed”, suggested the consumer activists.

On mode of procuring set-top box, while majority of respondents in Delhi, Mumbai and Kolkata expressed their preference to buy, majority of respondents in Chennai prefer to rent a set-top box. Sixty-seven percent respondents do not mind advertisements during TV programmes. In contrast, only 3 out 10 respondents are willing to pay more if advertisements are removed from TV programmes.

While TRAI is working on its recommendations on CAS, several alternative technologies, such as DTH, broadband and Trap, have emerged. This requires the regulator to look at the full spectrum of issues involved in broadcast and cable regulation.

The Ministry of Information & Broadcasting in its bid to encourage alternative delivery platforms to provide choice to consumers and hence competition at consumers’ end has asked TRAI to make recommendations such as all TV channels are available on all delivery platforms on a non-discriminatory basis. “However, given that Indian law is not applicable to broadcasters who have uplinking facility outside the country, it is to be seen what mechanism TRAI recommends to make available all TV channels on all delivery platforms”, said the activists.

“The best way to regulate the sector is by segmenting the market at consumers’ level and ensuring price caps and service standards. On the contrary, if we allow for more than one operator, then it would lead to dirty competition, as the operators would try to damage the infrastructure of other operators”.

“CUTS has prepared a Draft Cable TV Bill in this regard and is organising a one day Seminar in New Delhi on 18th October 2004 to deliberate on these issues. The seminar seeks to develop a consumer friendly cable TV system”, said Manish Agarwal, who prepared the report.