- Trai had recommended choosing HHI as the optimum parameter to gauge competition
- As per the conclusion, market dominance was to be determined by the market share in terms of active subscribers
Information and Broadcasting ministry (IMB) led by Prakash Javadekar has spoken about the issue of cable monopoly, which will require further consultation from the industry stakeholders. This has been said on the ground that the implementation done by the Telecom Regulatory Authority of India (Trai) on its recommendations has multi-dimensional implications. On a response to a question brought up in Lok Sabha, Prakash Javadekar said Trai’s recommendations on ‘Monopoly/Market Dominance in Cable TV Services’ dated 26th November 2013 have been considered by the Inter-Ministerial Committee of the ministry. He also remarked that these considerations also include Trai’s recommendations relating to the Herfindahl–Hirschman Index (HHI).
Trai Recommendations on Monopoly Termed Impractical
The minister remarked, “The acceptance of the recommendations has multi-dimensional implications which require consultation with various stakeholders. No recommendation to Competition Commission of India (CCI) has been made in this regard.” The ministry of information and broadcasting had informed the parliamentary committee on Information Technology that the recommendations which Trai made on cable monopoly are impractical. The ministry had also sought the views of the Competition Commission of India (CCI) on the same.
To the reply made to the Parliamentary Committee on Information Technology, the ministry of information and broadcasting (MIB) had stated that these recommendations were earlier discussed in the Inter-Ministerial Committee in its meetings which were held on January 17 and January 22, 2014, after which the recommendations were accepted. It was after this that the ministry received word from the industry informing that the HHI wasn’t the appropriate index for measuring concentration in the media sector.
HHI Found to be Inappropriate for Measuring Concentration in the Industry
The ministry then remarked that the matter was examined in this ministry, and it was not found feasible as the recommendations appear to be impractical. In addition to this, the ministry informed that it is seeking the views of the Competitions Committee of India (CCI) on this. Back then, in its recommendations on ‘Monopoly/Market dominance in cable TV services’, Trai had recommended using HHI for measuring the level of competition or concentration in a relevant market.
Along with this Trai had also recommended restriction on 50% market share which corresponds to individual contribution of 2500 to market HHI by any individual/ ‘group’ entity through M&A/ ‘control’ of an entity over many MSOs/ LCOs. Now for assessing monopoly or market dominance of Multi System Operators (MSOs) in the TV channel distribution market, the state was chosen as the apt choice or as the relevant market. As per the conclusion, market dominance was to be determined by the market share in terms of active subscribers of MSOs in the relevant market.
Arpit spends his day closely following the telecom and tech industry. A music connoisseur and a night owl, he also takes a deep interest in the Indian technology start-up scene and spends rest of his time spilling poetry and stories on paper.