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TRAI seeks views on fixing entry-level net worth norm for MSOs in cable TV services

The Telecom Regulatory Authority of India (TRAI) has put out a consultation paper, seeking views on issues relating to entry-level net worth requirement for Multi-System Operators (MSOs) in cable TV services.

“The objective of the consultation paper is to deliberate whether there is a need to fix entry-level net worth for MSOs, and what its value should be for registration. Further, the paper seeks comments regarding the documents and method to assess the networth of an applicant, if a minimum value is prescribed,” it said in a statement.

The regulator issued the consultation paper after the Information and Broadcasting Ministry sought recommendations from TRAI on the subject.

As of March 2018, 1,471 MSOs are registered with the I&B Ministry.

Currently, the guidelines do not specify any minimum net worth requirements or an entry fee, and only a processing fee of ₹1 lakh is charged. On the one hand, with the emergence of OTT platforms, the regulator believes MSOs need substantial financial strength to upgrade their networks and remain competitive.

However, fixing an entry or exit barrier could deter first-generation and new entrepreneurs, TRAI added.

The consultation paper has also sought views on issues such as whether the net worth requirements should be fixed according to the proposed area of operations of MSOs.

It has also sought views on whether entry-level net worth norms should be fixed for MSOs operating in Jammu & Kashmir and the North-East region.

The regulator has also sought views on other issues such as whether the minimum net worth requirements should be based upon the average fixed cost incurred by an entrant, or a combination of average fixed and variable costs.

Source: The Hindu