Additionally, these losses continue to reverberate through an elaborate network of partnerships including, MSOs, broadcasters, and the government exchequer. MSOs or multi-system operators are channel partners that provide LCOs access to specific TV channels. The network of LCOs and MSOs is known as distribution platform operators or DPOs that control the vast highway of channels. Isn’t there a more effective method to plug the potential revenue leakage for upstream stakeholders?
A mandate on digital payments in this sector could ease some of the load. It would also reduce LCO billing and collection costs and avoid the risk of spreading infection between LCOs and the larger public. Right now, subscribers can opt for either a prepaid or a postpaid model. Many choose post-paid services and pay cable operators
in cash each month. If the telecom regulator (Trai) advises DPOs to offer promotions or discounts for à la carte and bouquet MRP pricing, these users would be incentivised to convert to a prepaid digital payment model. Digitising is a vital buffer against further disruptions.
It is time the cable industry
embraced the Digital India movement. Previously, an LCO could have objected to migrating users to a digital path due to the resources required to educate customers. Thanks to a massive push by the central government and technological advances in digital payments, this is becoming a moot point. Even kirana shops and small vegetable sellers accept digital modes like PayTM or PhonePe. Adoption is rapid as customers become receptive to the digital landscape.
Ninety nine per cent of Indians are on the Aadhaar system. The government is transferring coronavirus
relief packages digitally to citizens through the Jan Dhan Yojana programme. Set to grow over 20 per cent for the next four years, the volume of Indian digital payments is expected to surpass even China’s (KPMG). Even the prepaid payment instruments industry (PPI), that deals with small amounts, saw a 16 per cent increase from 2018 to 2019 (MediaNama).
Sectors that digitised operations reaped immense benefits (McKinsey). For example, the logistics industry reduced fleet turnaround time by 50-70 per cent. Post-demonetisation, India’s rank on the World Bank’s Ease of Doing Business Index leapfrogged to 77. The time is ripe for India to streamline the payment process for the cable TV industry.
Due to the Covid-19 crisis, the government requested broadcasters not to cut services even if payments could not be collected. We are talking about 117 million subscribers. Any drop in payments can and should be mitigated digitally. Broadcasters can then afford to keep the services activated and maintain their active workforce. The ultimate beneficiary is the viewer with uninterrupted viewing of channels.
In the short term, a Trai mandate that B&CS collections should be through digital payments could offer relief to the struggling sector. DPOs could promote incentives on both à la carte and bouquet pricing and drive subscribers to prepay, digitally. In the longer-term, the Trai could recommend that MIB implements a permanent mandate for end-to-end electronic payments in this sector through the licensing conditions for all the licensed broadcast distribution platforms.
In Dan Millman’s book, Way Of The Peaceful Warrior: A Book That Changes Lives, a character named Socrates said, “The secret of change is to focus all of your energy not on fighting the old but on building the new.” Opportunities are ripe to build a robust framework of digital B&CS payments. Incentivising subscribers to favour digital prepaid payments will modernise a valuable Indian industry and improve the quality of service.
The author is hon. fellow IET (London) & president, Broadband India Forum. Research inputs by Chandana Bala
Views are personal