FICCI-KPMG-Report-13-FRAMES

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40 The power of a billion: Realizing the Indian dream Industry wish-list Entity Wish-list Comment MSOs Introduce pricing freedom to broadcasters and mandate a revenue share between stakeholders • MSOs prefer pricing freedom for the broadcasters to fix consumer tariffs for different channels. • A market driven pricing model may lead to consumers in different areas paying different ARPUs for the same bouquet of channels. “ A better option would have been for the regulator to allow broadcasters to fix their MRP to end customers and then mandate a revenue share for the various players across the value chain. At least this should have been tried in the initial 1-2 years of DAS. It may be noted that during the CAS regime, the only problem that was highlighted (in terms of ARPU and ARPU share) was that broadcasters were not allowed to price their offerings - end customer price was regulated. “ - Subhashish Mazumdar Senior Vice President, IndusInd Media & Communications © 2013 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Incentives and support from the Government • Providing infrastructure status to the cable industry will enable easier MSO access to domestic funding critical for successive phases of digitisation. • Custom duty on set top boxes has been doubled to 10 percent. MSOs indicate that this has been done in order to provide a boost to the indigenous manufacturers. • MSOs prefer that instead of MSOs subsidizing the customer for the increase in STB cost, government provide these local manufacturers incentives and subsidies to enable them to be more costcompetitive vis-à-vis imported boxes. • Reduction in custom duty on digital headend equipments and set top boxes will provide a boost to the digitisation initiative. “ The entire onus of digitisation is on the MSOs. MSOs are obtaining boxes, subsidizing the boxes, and executing rollout on the ground. The government could play a more supporting role. For instance, instead of reducing customs duty on boxes, they have doubled it (to make the local STB manufacturing industry competitive vis-à-vis imports). While we appreciate that local manufacturing needs to be encouraged, the government should have given local manufacturers some fiscal incentives or removed VAT as done with the Telecom Sector or reduced it for a couple of years till the local manufacturers achieved economy of scale. This would have reduced the cost of the Stbs. Today, the MSOs are being penalized to make the local industry competitive. “ - Ravi Mansukhani Managing Director, IndusInd Media & Communications
The power of a billion: Realizing the Indian dream 41 Industry wish-list Entity Wish-list Comment DTH operators Rationalize taxes • The DTH industry is subject to multiple taxes. The tax levies on DTH industry includes an average of 10 percent entertainment tax, 10 percent in license fees, and an additional 10 percent customs duty on set-top-boxes. • Rationalization of taxes is expected to provide a boost to the industry enabling providers to invest in infrastructure development and customer acquisition. “ Rationalization of taxes is a crying need for the DTH industry. The industry is subject to entertainment tax, service tax, as well as license fee for the spectrum that total up to 32 percent of topline. In addition the customs duty on STBs has been doubled just when we were gearing up for phase 2 of digitisation with approx 5 Million boxes on high seas and in ports. “ Scan the QR code to hear more from Harit - Harit Nagpal Managing Director & CEO, Tata Sky Timely access to transponder space • Timely access to transponder space has been cited as a key concern. • Allowing DTH operators to buy transponder space in the open market will enable faster access to transponder space and eliminate capacity constraints. Reduction/ removal of customs duty on set-top-boxes • Approximately 95 percent of customer-end equipment (set-top-boxes and antennae) are imported. • DTH providers would also like to see a reduction in custom duty on digital head-end equipment and set-top boxes. Content and others Higher investment in content Good quality talent for media industry • High carriage fee and low subscription revenues limit broadcaster’s ability to invest in quality content. • As digitisation progresses further, television industry would like see higher investment in content in order to command subscription premium for an enhanced consumer experience. • Limited availability of quality personnel across the value chain constrains the ability of the television industry to innovate and create disruptive strategies for rapid growth. • Availability of academic programmes focused on the media sector, particularly television, will enable the sector to tap into the right people in terms of training skills and capability. “ “ “ Investment in content needs to increase significantly. - Uday Shankar CEO, Star India The industry is facing a severe challenge in terms of quality of talent across career stages. The challenge is in terms of training and capability, and also in terms of the sector attracting the right talent. “ - Uday Shankar CEO, Star India © 2013 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
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Music The success of the iTunes mod
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06 Round up of the year that was Th
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FICCI 2013 143 “ The Amendments t
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09 Outlook for the year The power o
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10 The power of a billion: Realizin
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11 Technology The power of a billio
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Acknowledgement We acknowledge the
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FICCI-KPMG-Report-13-FRAMES

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