Virtual monopolies have emerged in the cable distribution sector across several states that are not only threatening consumer interest but also leading to non-competitive practices, feels broadcasting regulator TRAI.
“It has been observed in some states that a single entity has, over a period of time, acquired several Multi System Operators (MSOs) and Local Cable Operators (LCOs), virtually monopolising the cable TV distribution,” the regulator said in a consultation paper released on Monday.
“Such monopolies or market dominance are clearly not in the best interest of consumers and may have serious implications in terms of competition, pricing, quality of service and healthy growth of the cable TV sector.”
The paper said that while there was competition among several MSOs in Delhi, Karnataka, Rajasthan, West Bengal and Maharashtra, a single player has become dominant in Tamil Nadu, Punjab, Odisha, Kerala, Uttar Pradesh and Andhra Pradesh.
In the paper, TRAI observed that with technological developments, Internet and telephone services may be provided over cable TV networks and the dominance of certain distribution companies could extend to these areas also.
The regulator made these observations in the consultation paper which invited views on the issue of monopolies and market dominance in the cable TV segment. TRAI had begun looking into the issue after Information and Broadcasting secretary U.K. Varma in a letter in December last year, suggested ways to break monopolies that certain MSOs had acquired in the cable sector.
Estimating on the basis of set top boxes (STBs) seeded by various companies during the digitisation drive, the regulator said that it seemed that in some cities certain MSOs control over 80 percent of the market.
In the consultation paper TRAI sought views on whether measures like imposing restriction on area of operations, or fixing a cap on market share of MSOs and other possible measures may prevent formation of monopolies.