The contentious carriage fee issue got a new twist on Tuesday with Essel Group's cable arm Wire and Wireless India Ltd (WWIL) agreeing to share revenues earned through carriage fee with its affiliate cable operators.
This move could shape future revenue share arrangements between Multi System Operators (MSOs) and local cable operators (LCOs). Carriage fee is the amount that broadcasters pay to MSOs to carry their channels on their platform, in order to gain more visibility.
Industry estimates suggests that nearly Rs 2,500-3,000 crore is shelled out by television broadcasters in the form of carriage fee. In the first phase of digitalisation, nearly Rs 1,000 crore is expected as carriage fee from broadcasters.
When contacted, a WWIL official said, “We have decided to share about 25 per cent of carriage fee revenues in the metros where digitalisation will happen. We could look at extending this revenue share arrangement with cable operators in other cities as digitalisation progresses.”
Ms Roop Sharma, President of Cable Operators Federation of India (COFI), said, “This could signal the way revenue share arrangements are done between local cable operators and MSOs.”
In the past, local cable operators have expressed their unhappiness with Telecom Regulatory Authority of India (TRAI)'s recommendation on revenue share arrangements. In its tariff order, TRAI has said that LCOs will earn about 45 per cent share from revenues earned if a subscriber opts for the basic tier and about 35 per cent share from monthly subscriptions. LCOs have also been pointing out that the additional revenues of carriage fee go into the coffers of MSOs.