City cable distributors keen to break free from service operators
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Cable operators, after the implementation of mandatory digitisation, are finding the revenue-sharing ratio between them and the Multi Service Operators (MSOs) "highly unfair" and now threatening to break free of the MSOs.
UCC, an association of at least 24 cable operators in south Kolkata, currently under the MSO, Siti Cable, is contemplating going digital all by themselves. "It has been a lot of hard work of the cable operators who have worked at the ground level to build up the infrastructure and subscriber base. Now, as digitisation comes to the picture, MSOs claim a huge chunk of the revenue share. I speak for myself and at least 24 other operators who have come under the umbrella of UCC have decided to pool in investment and go digital ourselves," said A Raj, chairman, UCC.
He said the MSOs were taking away 60 per cent of the revenue and they were left only with a mere 40 per cent. "With that we have to maintain infrastructure, both in and out of office, pay staff members, attend customer complaints and meet all the other peripheral expenses," he said.
Another leading cable operator, under Manthan MSO, is of the same opinion. "The MSOs have been practically bullying us with the revenue sharing ratio. It is time we thought different," he said.
MSO authorities have, however, reacted differently to it. While Amit Nag, CEO, DG Cablecomm said the cable operators were free to do so. "It is a free market and each one was free to implement their own business model, look into their profitability and rationale for pricing. It is the market forces that will ultimately decide who stays in the market and who is eliminated," Nag said.
A senior official of Den Networks said it was a wrong notion and that MSOs were not only suppliers of set top boxes. "MSOs set up the network, invested in technology and played the role of a consumer interface. Besides, the business of an MSO is a capital and technology-intensive one and there is no return on investment in a small scale," he said.