CASBAA: Pay TV is not a luxury

The government of India must re-think its approach to satellite services and start treating DTH and cable TV suppliers as a mass market communications providers rather than a luxury sector — and adjust tax levels appropriately. This was clearest message from the CASBAA India Satellite Industry Forum this week.

“With 120 million multichannel TV viewers including 30 million DTH subscribers, India is the one most exciting growth opportunities in the world,” said Simon Twiston Davies, CEO of CASBAA. “However there remain some massive challenges that need to be surmounted before India can take its place at the forefront of the global market. A backward-looking government approach to Indian pay-TV and other communications services is one of the biggest problems.”

Taxation was a hot topic, with levies on DTH operators now standing at 35 per cent – an unheard-of burden for an entertainment product that is an everyday experience for hundreds of millions of Indians. Investment restrictions and retail price caps were also highlighted as crucial impediments to growth. It was pointed out that the cable sector doesn’t face many of the same controls and tax enforcement of the cable sector is weak because of the structural under-declaration of subscriber numbers both to government and broadcasters alike.

“Time and again we heard that companies are hard pressed to make money in the content industry thanks to regulatory constraints, under-declaration, high carriage fees and rising costs,” said Twiston Davies.

More positively, it was projected that, within a year, a switch-off of analogue cable services will be imposed in Delhi, Mumbai, Kolkata and Chennai, with the rest of the country migrating from analogue to digital by 2015. This technology migration will be propelled partly by consumer pressures and demands that children’s content should be in local languages supported by more pay TV “shelf space”. Apart from analogue-to-digital convergence, the rise of Internet/IPTV and 3G-4G delivery systems will also gain momentum.

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