Reliance Jio Media Suggests Keeping Rs 18 Crore as Minimum Net Worth Requirement for MSOs to Trai

Trai had floated out a consultation paper a few weeks back titled Entry Level Net worth requirement of Multi-system Operators in Cable TV services'

Highlights
  • This consultation paper seeks to find out the minimum net worth for the setting up of an MSO
  • Reliance Jio Media has suggested Rs 18 crore based on CAPEX requirement to be the ideal amount

Last when we reported development about this, the Telecom Regulatory Authority of India (Trai) was ideating on the likely net worth of MSOs for their eligibility. Now a new update has come up which points out that Mukesh Ambani led Reliance Jio Media has made a suggestion about the eligibility of the MSOs saying that their minimum net worth should be Rs 18 crores. To recall, Trai had floated a consultation paper titled ‘Entry Level Net worth requirement of Multi-system Operators in Cable TV services’ to which Reliance Jio Media had drafted a counter comment saying that the figure of Rs 18 crores has been calculated keeping in mind the basic CAPEX requirement for getting an MSO off the ground.

New Trai Tariff Regime and Requirements for MSO Setup

This net worth amount also considers that the Multi System Operator (MSO) would have a channel capacity of 300 and a minimum of 50,000 subscribers which is the minimum number of viable subscribers for the MSOs to sustain in the business. Reliance Jio Media also added that this requirement is for headend, CAS and SMS system which would comply fully with the quality of service norms laid down by the Trai for the setup of an MSO.

To this, the company also added that the essence of the new Trai tariff regime of 2017 has to do with a level playing field for all the operators, DPOs, cable TV providers and MSOs and to bring fair pricing and enhanced quality for the subscribers. The new tariff regime is also in favour of all ownership models like registered partnership or proprietorship, registered companies or a group of individuals to meet the minimum requirements. The company has also proposed that in case of a group of individuals who want to setup MSO, the minimum net worth requirement must be verified by the submission of Net worth Certificate, Balance Sheet and P&L accounts to the Ministry of Information and Broadcasting (MIB).

CAPEX Requirement Should be the Real Factor Says Reliance Jio Media

These documents can further be examined by a Chartered Accountant (CA) to verify the net worth being claimed by the applicant. Reliance Jio Media also stated that classifying MSOs based on their area of operation would not be of much use since the CAPEX required for setting up for MSO infrastructures like headend, SMS and CAS would be substantial. The components which are variable in this picture are channel capacity, number of STBs network costs.

The company added, “Therefore, minimum CAPEX requirements will be similar for all MSOs irrespective of the area of operations, and hence the area of operations will not be a suitable criterion to determine minimum net worth criteria requirements.”

The company said that now classifying MSOs based on their area of operation would be a backward step and CAPEX requirement should become the parameter to determine the net worth in this case.

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AdilKiran Fernandes | GoaEsmailRanjanName Recent comment authors
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Adil
Adil

JIO is slowly killing all its competition with help from govt. In latest news Airtel, Vodafone, Idea slapped Rs 3,050 crore penalty in Jio interconnection case. In fact it was JIO which always blocked calls from/to BSNL

Kiran Fernandes | Goa
Kiran Fernandes | Goa

Actually, it’s the other way round. TRAI slapped 3k crore on avoid. Jio complained that they were blocking calls by not giving enough points of interconnect. They had done the same for other operators in the past, especially operators just starting out. It was a tactic to make people only go for avoid group. That’s how they got the market share before jio came. All their money spent on illegal activities is hitting them back in the form of fines. Karma happened.

Adil
Adil

That is what I wrote ‘In latest news Airtel, Vodafone, Idea slapped Rs 3,050 crore penalty in Jio interconnection case.’ . TRAI ignored JIO blocking other operator calls. I has both bsnl and jio and couldn’t connect from bsnl to jio.

Ranjan
Ranjan

Off topic #

I want to Port my number from Idea postpaid to Airtel prepaid. Do I have to pay any extra amount along with outstanding bill for porting, kindly help on this topic.

City
Bhubaneswar
Ranjan
Ranjan

My credit limit is 2200 on idea postpaid bill. Will I get charged if I send message to 1900 for porting currently I am on nirvana 299 plan.

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