No need to fix minimum entry level net worth for MSO registration: TRAI

The Telecom Regulatory Authority of India (TRAI) has released its recommendations on ‘Entry level Net-worth requirement of Multi System Operators (MSOs) in Cable TV Services’. The regulator stated that “There is no necessity for fixation of a minimum entry level net worth for MSO registration. As at present, any individual, company, corporate firm or LLP that fulfils provisions of the Cable TV Rules may be granted MSO registration.”

A Multi System Operator (MSO) is an authorised service provider, providing cable TV services to its subscribers. The Rule 11(3) of Cable Television Network Rules, 1994 prescribes the criteria of the applicant for grant of MSO registration.

TRAI’s response comes following a letter dated May 16, 2018 from the Ministry of Information and Broadcasting (MIB), where the Ministry had sought the regulator’s recommendations on the appropriate levels for fixation of entry level net-worth of the MSOs for operationalising cable TV digitisation across the country. Further details of the reference were shared by MIB vide its letter dated December 13, 2018.

In order to deliberate on various aspects related to the matter and to seek inputs from the industry stakeholders on relevant issue, the Authority issued a detailed Consultation paper on ‘Entry Level Net Worth for MSOs in Cable TV Services’, on April 9, 2019. Subsequently, an open house discussion was held on June 11, 2019, in Delhi, to seek the further views of the stakeholders on various issues.

Based on the comments of the stakeholders received during the consultation process and its own analysis, TRAI has finalised its recommendations on "Entry Level Net Worth requirement for MSO in Cable TV Services". The Authority has noted that the New Regulatory Framework provides an enabling environment for Small and Medium MSOs and up scaling of LCOs to MSOs.

Summary of recommendations:

1. The Authority recommends that there is no necessity for fixation of a minimum entry level net worth for MSO registration. As at present, any individual, company, Corporate firm or LLP that fulfils provisions of the Cable TV Rules, may be granted MSO registration.
2. The Authority recommends that there is no basis for introducing minimum net worth classification based on the area of operation for MSO registration. The DAS system enables subscription-based billing and there is no rationale of introducing area-wise registration.
3. As the area-wise minimum net worth classification for registration of MSO is not required, there is no need to prescribe minimum net worth for remote areas of Jammu & Kashmir or North-East region.
4. The Authority recommends that there is no merit in introducing minimum net worth for registration of MSOs based on network cost criteria.
5. The Authority recommends that MIB may prescribe a standard proforma for self-declaration of net worth by applicants seeking registration as MSOs.
6. The Authority recommends that MIB may consider skill development requirement of the sector and take appropriate action so that trained manpower is available to perform specialised tasks.