(23 December 2006 9:30 pm)

MUMBAI: Multi-system operators (MSOs) are going to launch a two-pronged attack to make digital cable TV under Cas (conditional access system) popular as they pitch themselves in battle against direct-to-home (DTH) service providers.

While a la carte channels at Rs 5 are an attractive option they are throwing open to consumers in the Cas belt, the MSOs are also working at bouquet packages to target different segments. Discounts on second TV sets will also be made available.

Hathway Cable & Datacom is the first MSO to have finalised its tiered packages for pay-TV subscribers, allowing them to budget their cable subscription under Cas. The monthly value packages start at a low of Rs 85 (see table) and go up to Rs 120 (see table).

With taxes and Rs 77 on free-to-air (FTA) channels, the rates work out to Rs 222 and Rs 266 in Mumbai (Delhi will be cheaper by Rs 25 because of lower entertainment tax), excluding the rent on STBs. Hathway will make available over 60 FTA channels.

"We are offering 20 pay channels for Rs 85 at a discount of 15 per cent (from the a la carte option). The other option available is Rs 120 for 30 channels. Consumers can thus look at bouquets with this kind of discounting," Hathway Cable and Datacom managing director and CEO K Jayaraman tells Indiantelevision.com.

On the second TV set, Hathway is offering two packages: 15 channels (see table) for Rs 40 (discount of 50 per cent); and 28 channels for Rs 55 (50 per cent discount). While those who subscribe to the Family Mix (Rs 120) can take either of the two schemes for the second TV set, subscribers of Rs 85 (Desi and Videsi Mix) can't take the Rs 55 Double Dhamaka offer of Rs 55 for the second TV set.

"The economics won't work and our ARPUs (average revenue per user) would be terribly hit. So we have kept the packages that way. We feel the Family Mix is ideally suited for the Double Dhamaka offer on their second TV set as we are targeting a slightly upscale audience. For the Desi and Videsi Mix, our focus is on SEC B customers. Under this segment, we have divided the customers into those with Hindi and with English preferences," says Jayaraman.

ESPN and Star Sports are not included in the discount package for the second TV set. Consumers who take a la carte channels on their first TV, are also not offered any discounts on the second set.

Interestingly, the Zee-Turner channels are outside the bouquet offering, indicating a turf war that could emerge between the MSOs. And CNBC channels, which are distributed by Zee-Turner, have struck an independent deal with Hathway Cable & Datacom.

Sources in the industry say Wire & Wireless India Ltd (WWIL), the demerged cable company of Zee Group, is also working on a basic package where it will load Zee channels while keeping one or two popular channels of Star and SET-Discovery. WWIL CEO had earlier told Indiantelevision.com that he would be introducing a combo package where consumers who buy STBs on outright purchase and take annual subscription will be offered an attractive subsidy and at least 20 pay channels.

Clearly, Zee Telefilms founder Subhash Chandra is making an all out effort to hold the distribution business in his grip. He is set to give an aggressive push both to Dish TV, his DTH business, and WWIL. With Zee TV also gaining in ratings, he has ammunition on the content front as well.

The fight between Rupert Murdoch and Chandra is going to gather fresh colour in 2007. News Corp has a 20 per cent stake in DTH platform provider Tata Sky and 26 per cent in Hathway Cable & Datacom. Also grounded in the battle will be other MSOs like Hinduja-owned Incablenet as the cable industry enters the phase of consolidation.

"We have not been able to arrive at an agreement for including Zee-Turner channels in our package offerings. When we manage to do so, we will make another package for consumers," says Jayaraman.

What this means is that in the lowest package offering of Hathway, Zee-Turner channels will not be included. Though Jayaraman gave no definite answer, sources say Star and Sony have given discounts to Hathway on the second TV set.

WWIL, on the other hand, will work out attractive pricing and packages where Zee channels are preferred. Chandra has a bouquet of regional channels which he will also try to leverage to his advantage.

Hathway has not packaged the regional channels. "For those who want regional channels, they can take it on a la carte basis. Zee channels are also available on a la carte basis. By creating bouquets, we are offering consumers a wider choice," says Jayaraman.

Clearly, the ground for battle between DTH and cable in 2007 is being laid out. It looks like a price war is going to be fought to win subscribers.

Table elaborating Hathway's package offerings: