TRAI Against Setting Basic Net-Worth Norm For MSOs

The Telecom Regulatory Authority of India (TRAI) said that it there is no need to set a minimum net-worth criterion for the registration of Multi-System Operators (MSOs). It has recommended that any individual, company, corporate firm or LLP that fulfils the provisions of the Cable TV Rules be granted MSO registration.

The regulator made its recommendation on the issue after the Ministry of Information and Broadcasting had sought its recommendations on setting entry-level net-worth criterion for MSOs across the country. Earlier this year, TRAI had issued a consultation paper to seek industry views on the issue and on the subject whether the net-worth criterion should be based on area of operations or network cost.

“From the point of plurality and diversity of content, the regional MSOs are necessary in the cable TV sector as they can better provide the programme diversity to cater to the regional/local tastes. A minimum net-worth criterion for 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,” the regulator said in its recommendations.

TRAI added that such an entry barrier may adversely affect overall programme diversity and development of local and regional content.

There are currently more than 1,000 operational MSOs in India.

It also said that there is no basis for introducing minimum net-worth classification based on the area of operation for the registration of MSOs. “The DAS (Digital Addressable Cable) system enables subscription-based billing, and there is no rationale of introducing area-wise registration,” it added.

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.

Currently, the I&B Ministry prescribe a minimum net worth requirement for broadcasters and ‘Head-end In The Sky (HITS)’ operators. DTH service providers are also required to pay a minimum entry fee on obtaining a licence. However, for MSOs, the guidelines do not specify any minimum value of net-worth; an applicant is only only required to declare its net-worth.―The Hindu Business Line

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