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After disrupting telecom, Jio poised to disrupt cable operators

After disrupting telecom, Jio is poised to disrupt cable operators.

By deciding to stream the upcoming Indian Premier League (IPL) on JioCinema without charging any subscription fee, Reliance Jio is doing to cable TV operators what it did to incumbent telecom operators seven years ago.

Jio had then decided to charge only for data and not voice usage, which made incumbent operators like Bharti Airtel and Vodafone Idea follow suit. It dealt a further blow to incumbents by offering free services to users for the first six months after launching its services.

Just as telecom operators had then cried foul, cable TV operators are doing now free streaming on the company’s digital platform, JioCinema.

The timing could not have been worse for local cable TV operators as they also have to raise monthly rates for cable connection by 10-15% in keeping with the Telecom Regulatory Authority of India’s latest tariff order, which has raised channel prices in a bouquet to Rs 19 from the earlier `Rs 2.

Cable TV operators, who are already facing cord-cutting by a section of subscribers shifting to OTT platforms, fear that a rate hike at a time when JioCinema will stream IPL for free would further lead to a loss of subscribers for them.

The fear is not unfounded. Several multiple system operators (MSO) have switched off the channels of major broadcasters like Star, Zee, and Sony in the last few days by deciding not to sign the agreement to pay higher rates for their channels. MSOs act as intermediaries between broadcasters and local cable TV operators. The latter then provides services to consumers.

Moreover, Jio has ownership of MSOs like Hathway Cable, GTPL Hathway, and DEN Networks, which own a large number of cable systems.

According to industry sources, MSOs that are owned by Reliance has 40% of the television subscriber market and have also not yet complied with the new tariff order.

Analysts said Reliance’s presence at all levels —OTT, television broadcasting, and cable television — will ensure that a large section of subscribers will remain in their fold.

This cannot be said about stand-alone cable TV operators.

Interestingly, while other channels like Star and Zee have stopped signals of their channels to some cable operators, channels owned by Reliance-owned

Viacom 18 continues to be available despite the non-implementation of tariff hikes.

Viacom18 owns and operates 59 TV channels (like Colors, Sports18, and MTV) catering to all genres like general entertainment, movies, sports, and music.

“We have evaluated the market situation very seriously and are constrained to take a decision to move ahead and sign the RIO (reference interconnect offer) agreement with broadcasters. Moreover, Jio and DTH platforms are exploiting this crisis and adopting new strategies to capture our valuable customers,” said Kerala Communicators Cable in a letter to the All India Digital Cable Federation (AIDCF).

The Kerala high court is currently hearing a case filed by AIDCF against Trai’s new tariff order. Financial Express

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