The Telegraph
Since 1st March, 1999
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STAR catches rivals off guard with bouquet price cut

Calcutta, Dec. 9: Signalling a first in the cable and satellite industry, STAR has announced a Rs-10 rollback of its package rate.

The bouquet of eight pay channels from the Rupert Murdoch stable, which costs Rs 40 per consumer point, will retail for Rs 30 instead from January 1, 2003.

“Our focus is to provide even better value to our viewers and cable operators across the country. By reducing our price, we believe that cable operators and ourselves can work together for the long-term benefit of the households that view our channels every day,” STAR India Ltd chief executive Peter Mukerjea said in a statement on Monday.

“Our decision to scale down the bouquet cost has been taken with the benefit of the consumer in mind. Whenever there is a rate hike at the broadcaster’s end, cable operators tend to pass on the burden to the hapless viewer, who has now been pushed to the wall,” Yashpal Khanna, senior vice-president, corporate communications, STAR India Ltd, told The Telegraph.

Khanna said the time has come for the industry to be “more transparent”, indicating that STAR is likely to now go for increased last-mile connectivity with a vengeance.

The competition, taken aback by the industry leader’s surprise rate-cut, was quick to term the rollback an “eyewash”.

The STAR turn is actually the “steepest hike” and not a reduction, asserted Zee-Turner CEO Sunil Khanna. “The payout on the part of the cable operator will increase by at least 50 per cent and, if you take into account the various slabs linking rate to connectivity, the cost at the consumer’s end can only go up,” he said.

The Zee-Turner CEO went on to add that STAR’s slash would only confuse the operators.

“The concept to raise more numbers from the ground is not wrong, but the question is who decides what the real connectivity is. I feel there should be some uniformity among broadcasters in terms of pricing strategy so as not to send out confusing signals to the market,” he said.

Zee-Turner, which was reportedly readying a rate hike of around Rs 20 for its bouquet (from the present Rs 40), could be forced into a serious rethink.

Sony can do little now, having already announced a hike of its package rate by Rs 15, from Rs 40 per connection to Rs 55. It termed STAR’s strategy “a camouflaged rate hike” that would increase operators’ payout by almost 66 per cent.

“Yes, we have already played our card, but we are not afraid of the STAR move. With the World Cup for cricket round the corner and with the acquisition of HBO from Zee-Turner, ours is now the strongest bouquet in terms of content quality and the Rs-15 raise is extremely reasonable,” said Shantonu Aditya, president, SET-Discovery.

Operators, too, are sceptical about the rollback.

“It’s just a gimmick and perhaps a ploy to try and stonewall the conditional access system Bill, which comes up for discussion in the Rajya Sabha on Tuesday. With the kind of numbers STAR is hinting at, we can’t protect the consumers. Subscriber rates are set to go up by Rs 50-60 in the New Year,” said Tarak Saha, secretary, Forum of Cable Operators, Calcutta.

Nonetheless, industry-watchers have termed STAR’s move “a masterstroke” in the overheated cable industry. “They might succeed in pushing rivals to the edge and picking up kudos from the consumer,” said a veteran in the cable and satellite industry, adding that this could be the first salvo in a satellite price war.

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