A

1

• A
• PRESENTATION
• TO
• TELECOM DISPUTES SETTLEMENT APPELLATE TRIBUNAL
• (TDSAT)
• Presented by
• Jawahar Goel
• President
• Indian Broadcasting Federation

2
This presentation is the personal view of the
speaker and should not be treated as the view of
the IBF.
2
3
INDUSTRY ON A GROWTH PATH

• The Broadcasting Sector in India is undergoing a
  process of sweeping changes driven by advent of
  new distribution technologies such as DTH,
  Broadband, CAS, HITS, IPTV, etc.
• A recent report by Price Water Cooper (PWC) has
  projected
• Indian entertainment media industry is expected
  to grow at 18 compound annual growth rate
  (CAGR).
• Reach a projected size of Rs.1 lac Crore by 2011
  from its present size of Rs.43,700 Crores.
• The Television industry is projected to grow 22
  CAGR from Rs.19,100 Crores to Rs.51,900 Crores by
  2011.

3
4
LEAKAGES HAPPENING AT LCO LEVEL
LCOs 76 80 Leakage
Broadcaster 12-15
Subscriber 100
MSO 4-6
Broadcaster Distribution Company 2
Source SSKI Reasearch
Distribution of Revenues
4
5
Broadcasters Share Far Below the Global Average
()
Source SSKI Research
5
6

• REVENUE LEAKAGE DUE TO UNDER DECLARATION BY
  CABLE OPERATORS

• Last mile Cable Operators highly under-declare
  the subscribers numbers which not only means loss
  of revenue to Broadcasters, but also to the
  Government by way of non-payment of taxes viz
  Service Tax, Entertainment Tax, Income Tax etc.
• As per the survey conducted by Centre for Media
  Studies (CMS) of 9 cable operators in C and D
  class cities for IBF, in most places, the actual
  subscriber numbers were found to be many times
  more than that reported by the local cable
  operators.

6
7
CMS SURVEY REPORT OF CABLE OPERATORS SUBSCRIBER
BASE
7
From different sources
8

• Bulk of cable TV subscription is retained by
  local cable operators (LCOs) who declare only a
  fraction of actual number of subscribers to MSOs
  paying a portion of subscription fees. The
  distribution of revenue in non-addressable
  environment is highly skewed in favour of
  distributor of channels and the broadcaster get
  only a fraction of only 12-15 of the
  subscription amount paid by the subscriber.
• It should be made mandatory for all the cable
  operators to register with Service Tax
  authorities and the authorities should launch
  periodic campaigns to ensure that all last mile
  cable operators are registered and display their
  registration certificates prominently so as to
  ensure the proper realisation of Government
  revenue.
• The extent of leakage of service tax revenue in
  various cities is reflected in subsequent slides.
  The same holds good for leakage in Entertainment
  Tax revenue as well.

8
9
DATA REGARDING LEAKAGE OF SERVICE TAX BECAUSE OF
UNDER DECLARATION (Source NRS RTI Data)
Means service tax declaration of 6.8 only
9
10
LEAKAGE OF SERVICE TAX BECAUSE OF UNDER
DECLARATION (Source NRS RTI Data)
10
11

• CARRIAGE FEE PIRACY
• HINDERING THE GROWTH

• Cable operators demand huge carriage fee from
  Broadcasters particularly from FTA Channels
• Nearly Rs. 1400 Crores/p.a. of carriage fee is
  being paid just in 150 cities cable operators by
  channels
• When seeking for carriage fee those MSO,s demand
  based on lakhs of subscriber base.
• Viewers are being deprived of favorite channels.
• News channels are forced to divert their finical
  resources to pay carriage fee then to deploy in
  research for meaning full news reporting, leads
  to low quality of news content
• Further loss of revenue to broadcasters because
  of rampant piracy prevalent in cable
  distribution.

11
12
SOLUTION

• The cable distribution should move towards
  digitalisation under declaration be treated as
  piracy

12
13
THANK YOU