POTENTIAL
Favourable demographics and socio economic factors leading to high growth:
Growth of disposable income combined with changes in lifestyle
Increasing affordability - low tariffs, easy payment plans and handset financing
Increased coverage and availability of mobile services
Investment opportunity of $22 billion across many areas:
Telecom Devices and Software for Internet, Broadband and Direct To Home Services. Set Top boxes, Gateway exchange, Modem, Mobile handsets and consumer premise equipments, Gaming devices, EPABX, Telecom Software
Telecom Services for voice and data via a range of technologies
Applications and Content development ranging from gaming to education
Nokia, Elcoteq, Alcatel, LG, Ericsson are all investing in India
Background information about Cable TV operations:
The channels that we see on TV are created by different broadcasters. These channels are of two types, viz., “pay” channels and “free to air (FTA)” channels. Pay channels are those for which the broadcasters charge an amount, while the FTA channels are given by the broadcasters without any payment. These broadcasters transmit the signals of these channels from satellite to receiving stations owned by Multi System Operators (MSOs). The MSO in turn retransmits these signals through cables to the cable operators, who have their own “last mile” cable network to individual homes and customer premises. The present practice in India is that the MSO, after buying / receiving the signals of various channels (both pay and FTA) from different roadcasters, makes them into one single bouquet or bundle and transmits them to individual subscribers’ homes through the cable operators, and charges us for the entire bundle. This results in aubscriber paying for a channel or channels which he does not want to see, but for which he has to pay because it forms part of the bundle. This is not to say that the MSO is at fault, because the MSO has to cater to different tastes of individuals who are all residing in the same locality being served by him through the cable operator.
However, with the advancement of technology, it is now possible for the consumer to decide and choose which pay channels he wants to see and pay only for such pay channels. Of course, this requires investments to be made both by the MSOs and the consumers (or subscribers) in certain hardware and software. In particular, the subscriber will need a “Set Top Box” with a viewing card/smart card in it. Once this is done, then it becomes possible for the MSO to encrypt the signals for all the pay channels, transmit these encrypted signals of pay channels and unencrypted signals of FTA channels to subscriber’s set top box, where the viewing card / smart card decrypts the signals of only those pay channels for which the subscriber has chosen to pay and watch. Of course, FTA channels will automatically be available for viewing because its signals are not encrypted.
Conditional Access System (CAS) or Addressable System is a description normally used for a set of hardware devices and connected software (including a set top box) used at different stages of distribution of a TV channel through which normally the pay channels are transmitted in encrypted form. The subscriber is given an authorization depending upon his request to view one or more of such encrypted pay channels of his choice. The subscriber will pay for those pay channels which he or she has chosen to view in such a system. The authorization is given and controlled by the Multi System Operator (MSO) who owns the Conditional Access System in a Cable Television Network. In this, he is often assisted by the Local Cable Operator. The words
“Conditional Access System” and “Addressable System” are quite often used interchangeably. “Addressable system” signifies that a subscriber is identifiable. The Multi System Operator and the broadcaster will know the exact number of subscribers of a pay channel or a bouquet of pay channels and the amount that is due from that subscriber.
“CAS area” means area or area(s), in which in terms of notification issued by the Government of India under The Cable Television Networks (Regulation) Act 1995, it is obligatory for every multi system operator/cable operator to transmit or retransmit programmes of any pay channel through an addressable system from a specified date. This in effect means that the pay channels in that area will be encrypted and for viewing the pay channels in such area, a subscriber will have to have a Set TopBox.
Currently CAS has been made applicable to entire Chennai Metropolitan Area and will come into force from 31st Dec2006 in certain parts of Delhi, Mumbai, and Kolkata. A complete list of these notified areas is available on TRAI’s For further details one can contact the nodal officer appointed by the State Government. It is clarified that it is only in the area or area(s), which is notified for CAS implementation, that a set top box to watch the pay channels through the Cable Television Network will be required for all the subscribers living in that notified area.
Non CAS is different from CAS
Under a Non Conditional Access System or a Non Addressable System, the pay channels are sent in unencrypted form and the subscriber will not have any option to choose a pay channel of his choice and pay for that only. Under this system, which is prevalent in the country excepting in Chennai (and from 31.12.2006 in parts of three metros of Mumbai, Delhi, and Kolkata), a subscriber has to pay for all the channels that he receives from the cable operator irrespective of the fact whether he wishes to view a particular channel or not. On the other hand, a subscriber under CAS regime will be free to choose channels of his choice and pay only for such channels.
C. Set Top Box, Smart Card, STB Tariff package etc
“Set top box”(STB) means a device, which is connected to a television set at the subscribers’ premises and which allows a subscriber to view encrypted pay channels of his choice on payment. The basic function of the Set Top Box is to decrypt the signals of those pay channels which the subscriber has been authorized by the multi system operator to receive and to convert the digital signals into analogue mode for viewing on television sets.
A smart card or a viewing card essentially functions like an ATM Card and
comes along with the Set Top Box and allows the signals of only those pay channels to
be seen which the subscriber has contracted to pay for a particular period.
What are the details of the Standard Tariff Package prescribed by Telecom Regulatory Authority (TRAI) of India for Set Top Boxes (STBs) ?
Vide its Tariff order dated 31.8.2006, TRAI has provided for a Standard Tariff Package for supply of STBs. The package provides that every multi system operator / cable operator in a CAS area shall compulsorily offer to the subscribers both Option I (Rental of Rs.30 P.M+ Refundable security Deposit of Rs.999/-) and Option II (Rental of Rs.45 P.M+ Refundable security Deposit of Rs.250/- ) as a standard tariff package (STP). No monthly rental will be payable after 5 years and the Set Top Box will become the property of the subscriber
Can I return the Set Top Box taken on Rental Basis?
Yes, one can return the Set Top Box taken on rental Scheme under the Standard Tariff Package within a period of five years, provided the set top box has not been tampered with. On return of the Set Top Box under the Standard Tariff Package, Multi System Operator is entitled to make a deduction @ Rs. 12.50 / Rs 3.00 per month of use on account of depreciation from the security deposit under option I or option II respectively. However, where a subscriber has already taken a Set Top Box under the Standard Tariff Package and takes a refund after surrendering the Set Top Box then that subscriber will not be entitled to a new Set Top Box under the Standard Tariff Package (from the same service provider) unless he/she is shifting residence to another city or to
another area in the same city where the service is not available from the same multi
system operator..
In cases where a customer chooses to return a set top box, the refund of security deposit, if any, shall be made within seven days as per the prescribed scale. This will not apply to cases of return of set top box where it is found that the set top box returned has been tampered with by the subscriber. In such cases the cable operator /MSO shall inform the subscribers within 4 weeks about their decision in the matter.
In cases where there is a malfunction of a set top box supplied, by a cable operator / MSO, then he will arrange for repair or replacement, (without any extra charge upto five years) as the case may be, within 24 hours of receipt of the complaint of malfunctioning. This will not apply to cases of complaints of malfunctioning where the set top box has been tampered with by the subscriber.
Is the Standard Tariff Package the only package?
No. In addition to the Standard Tariff Package containing two options as mentioned in
answer to Question No 12 to be compulsorily offered to the subscriber, a multi system operator /
cable operator is free to offer alternative tariff packages (ATP) which the subscribers can
choose from. TRAI has not prescribed any scheme for outright purchase from open market
or from the MSO.
The requirement of application form for subscribers of pay channel but not for subscribers of basic service tier, comprising of free to air channels, in CAS Areas should not be construed as exclusion of the latter category of subscribers from the applicability of the clauses providing for standards of quality of service relevant to them.
Benchmarks for Billing Related Issues
Subscribers in CAS areas will generally be billed on monthly basis and the bill should indicate the Service Tax Registration Number, Entertainment Tax Registration number of the MSO or the cable operator, as the case may be, as applicable. The entries in the bills must be itemized to separately indicate price of individual pay channel(s) or bouquet(s) of pay channels and the names of channels in the bouquet, as applicable, charges for basic service tier and the channels comprised therein, charges for set top box, amount of each type of tax levied and the rate thereof. This, however, does not preclude a cable operator /MSO, from promoting different schemes of payment in which case the bills can be raised at such periodicity as per the scheme opted by the subscriber.
The subscribers will ensure prompt payment of all bills within 7 days from the date of receipt of the bill. Any payment done after the expiry of 7 days will attract simple interest @ 15% p.a on the amount of bill delayed. The interest for such delayed payment will be calculated on a pro-rata basis for the number of days of delay. For each and every payment made by a subscriber, the cable operator/ MSO, as the case may be, will issue a proper receipt.
The following procedure will normally be followed for raising of bills, delivery of bills and collection of payments thereof: i) In respect of subscriber opting to watch pay channels through a set top box, a single bill will be generated by the MSO, indicating the charges for pay channels as well as charges for channels forming part of the basic service tier .The subscriber should be required to make only one payment. ii) In respect of subscribers who do not opt to watch pay channels through the set top box, the monthly bill will be raised for FTA channels and the proceeds collected by the cable operator.
The billing system should be such that the following benchmarks are met:
i) Complaints relating to billing will be addressed within 7 days of notice from the subscriber.
ii) Refunds must be issued within 30 days following the resolution of the complaint or before the next billing cycle whichever is earlier.
In CAS areas, change of positioning of TV channels comprised in the basic service tier by the MSO should not normally be done. In case of pressing technical reasons requiring changes of TV channel position, the subscriber will be notified at least 3 days in advance of such occurrence. For the purpose of information to the subscribers, a scroll indicating the frequency in which a particular channel is placed will be run at periodic intervals. In no circumstances, unless it is beyond the control of the MSO, a channel positioned in a particular frequency shall be taken off the air without giving prior notice of at least three weeks along with the reasons for taking it off the air. This notice must be given to all subscribers through an advertisement in two local newspapers or by running a scroll in the relevant channel(s).
CHAPTER I
Preliminary
This Act may be called the Telecom Regulatory Authority of India Act, 1997.
"telecommunication service" means service of any description (including electronic mail, voice mail, data services, audio tex service, video tex services, radio paging and cellular mobile telephone services) which is made available to users by means of any transmission or reception of signs, signals, writing, images and sounds or intelligence of any nature, by wire, radio, visual or other electro-magnetic means but shall not include broadcasting services.
Telecom Regulatory Authority of India
Establish- ment and incorporation of Authority
3 (a) With effect from such date as the Central Government may, by notification appoint, there shall be established , for the purposes of this Act, an Authority to be called the Telecom Regulatory Authority of India.
(b) The Authority shall be a body corporate by the name aforesaid, having perpetual succession and a common seal, with power, subject to the provisions of this Act, to acquire, hold and dispose of property, both movable and immovable , and to contact, and shall, by the said name, sue or be sued.
(c) The authority shall consist of a Chairperson, and not less than two, but not exceeding six members , to be appointed by the Central Government
(d) The head office of the Authority shall be at New Delhi
Quali- fications for appointment of Chairperson and other Members
4 (a) The Chairperson shall be a person who is or has been a Judge of the Supreme Court or who is or has been Chief Justice of a High Court .
(b) A Member shall be a person who has special knowledge of, any professional experience, in telecommunication, industry, finance, accountancy, law, management and consumer affairs;
Provided that a person who is or has been in the service of Government shall not be appointed as a member unless such person has held the post of Secretary or Additional Secretary, or the post of Additional Secretary and Secretary to the Government of India or any equivalent post in the Central Government or the State Government for a period of three years
Term of office conditions of service, etc., of Chair- person and other members
5 (a) Before appointing any person as the Chairperson or Member, the Central Government shall satisfy itself that the person does not have any such financial or other interest as is likely to affect prejudicially his functions as such member.
(b) The Chairperson shall hold office for a term of five years from the date on which he enters upon his office .
(c) A member shall hold office for a term of five years from the date on which he enters upon his office or until he attains the age of sixty five years, whichever is earlier.
(d) The employee of the Government on his selection as member shall have to retire from service before joining as a member.
(e) The salary and allowances payable to and the other terms and conditions of service of the Chairperson and other members shall be such as may be prescribed.
(f) The salary, allowances and other conditions of service of the Chairperson or of a member shall not be varied to this disadvantage after appointment.
(g) Notwithstanding anything contained in sub-section (2) or sub-section (3), a member may-
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relinquish his office by giving in writing to the Central Government notice of not less than three months; or
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be removed from his office in accordance with the provisions of section 7.
(h) The Chairperson or any other member ceasing to hold office as such, shall-
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be eligible for further employment under the Central Government or any State Government; or
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not accept any commercial employment, for a period of two years from the date he ceases to hold such office.
(i) A vacancy caused to the office of the Chairperson or any other member shall be filled up within a period of three months from the date on which such vacancy occurs.
Explanation - For the purposes of this section, "commercial employment" means employment in any capacity under, or agency of, a person engaged in trading, commercial, industrial or financial business in any field and includes also a director of a company or partner of a firm and it also includes setting up practice either independently or as partner of a firm or as an adviser or a consultant
Powers of Chairperson and Vice- Chairperson
6 (a) The Chairperson shall have powers of general superintendence and directions in the conduct of the affairs of the Authority and he shall, in addition to presiding over the meetings of the Authority, exercise and discharge such powers and functions of the Authority and shall discharge such other powers and functions as may be prescribed.
(b) The Central Government may appoint one of the members to be a Vice-Chairperson of the Authority who shall exercise and discharge such powers and functions of the Chairperson as may be prescribed or as may be delegated to him by the Authority
6 (a) The Chairperson shall have powers of general superintendence and directions in the conduct of the affairs of the Authority and he shall, in addition to presiding over the meetings of the Authority, exercise and discharge such powers and functions of the Authority and shall discharge such other powers and functions as may be prescribed.
(b) The Central Government may appoint one of the members to be a Vice-Chairperson of the Authority who shall exercise and discharge such powers and functions of the Chairperson as may be prescribed or as may be delegated to him by the Authority
Powers and Functions of the Authority
1. (1) Notwithstanding anything contained in the Indian Telegraph Act, 1885 the functions of the Authority shall be to-
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recommend the need and timing for introduction of new service provider;
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recommend the terms and conditions of licence to a service provider;
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ensure technical compatibility and effective inter-connection between different service providers;
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regulate arrangement amongst service providers of sharing their revenue derived from providing telecommunication services;
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ensure compliance of terms and conditions of licence;
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recommend revocation of licence for non-compliance of terms and conditions of licence;
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laydown and ensure the time period for providing local and long distance circuits of telecommunication between different service providers;
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facilitate competition and promote efficiency in the operation of telecommunication services so as to facilitate growth in such services;
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protect the interest of the consumers of telecommunication service;
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monitor the quality of service and conduct the periodical survey of such provided by the service providers;
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inspect the equipment used in the network and recommend the type of equipment to be used by the service providers;
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maintain register of interconnect agreements and of all such other matters as may be provided in the regulations;
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keep register maintained under clause (l) open for inspection to any member of public on payment of such fee and compliance of such other requirements as may be provided in the regulations;
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settle disputes between service providers;
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render advice to the Central Government in the matters relating to the development of telecommunication technology and any other matter reliable to telecommunication industry in general;
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levy fees and other charges at such rates and in respect of such services as may be determined by regulations;
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ensure effective compliance of universal service obligations;
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perform such other functions including such administrative and financial functions as may be entrusted to it by the Central Government or as may be necessary to carry out the provisions of this Act.
13A.Powers of Authority to call or information conduct investigations, etc
2) Notwithstanding anything contained in the Indian Telegraph Act, 1885, the Authority may, from time to time, by order, notify in the Official Gazette the rates at which the telecommunication services within India and outside India shall be provided under this Act including the rates at which messages shall be transmitted to any country outside India;
Provided that the Authority may notify different rates for different persons or class of persons for similar telecommunication services and where different rates are fixed as aforesaid the Authority shall record the reasons therefor.
(3) While discharging its functions under sub-section (1), the Authority shall not act against the interest of the sovereignty and integrity of India, the security of the State, friendly relations with foreign States, public order, decency or morality.
(4) The Authority shall ensure transparency while exercising its powers and discharging its functions.
12. (1) Where the Authority considers it expedient so to do, it may, by order in writing.
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call upon any service provider at any time to furnish in writing such information or explanation relating to its affairs as the Authority may require; or
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appoint one or more persons to make an inquiry in relation to the affairs of any service provider; and
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direct any of its officers or employees to inspect the books of account or other documents of any service provider.
(2) Where any inquiry in relation to the affairs of a service provider has been undertaken under sub-section (1)-
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every officer of the Government Department, if such service provider is a department of the Government;
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every director, manager, secretary or other officer, if such service provider is a company; or
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every partner, manager, secretary or other officer, if such service provider is a firm; or
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every other person or body of persons who has had dealings in the course of business with any of the persons mentioned in clauses (b) and (c), shall be bound to produce before the Authority making the inquiry, all such books of account or other documents in his custody or power relating to, or having a bearing on the subject-matter of such inquiry and also to furnish to the Authority with any such statement or information relating thereto, as the case may be, required of him, within such time as may be specified.
(3) Every service provider shall maintain such books of account or other documents as may be prescribed.
(4) The Authority shall have the power to issue such directions to service providers as it may consider necessary for proper functioning by service providers
Powers of Authority to issue directions
13. The Authority may, for the discharge of its functions under sub-section (1) of section 11, issue such directions from time to time to the service providers, as it may consider necessary.
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