Moratorium on CATV operators mulled

MANILA, Philippines - The National Telecommunications Commission (NTC) and the local cable television (CATV) industry are working on a measure that will impose a five to seven-year moratorium on the grant of licenses to new CATV operators to stop the overcrowding of the sector that has dampened revenues in the past years.

Philippine Cable Television Association (PCTA) president Allan Dungao disclosed at the sidelights of yesterday’s PCTA convention that the NTC is amenable to the industry’s proposal to temporarily put a stop to the issuance by the commission of licenses to new entrants.

Dungao said that the NTC has issued 1,500 CATV licenses, of which only a little over 400 are being utilized. Some of the licenses have already been recalled by the NTC for non-use.

The PCTA head said that the industry and the NTC plan to sit down next month to discuss the details of the proposed moratorium, which he emphasized is much-needed to put a stop to the ruinous competition. “There are as much as three to four operators in one area. That is too much for the existing operators to survive financially,” he stressed.

In exchange for the moratorium, Dungao disclosed that the existing CATV operators are committing to upgrade their operations and invest more in their business.

Less competition, he stressed, will mean increased chances for more subscribers and more revenues that could help the industry afford the shift from analog to digital.

Due to the cutthroat competition in the CATV industry, Dungao said many operators have either folded up to merged with other players. The biggest merger was between the country’s two leading CATV operators, namely SkyCable and Home Cable, with SkyCable being the surviving entity and acquiring the assets of the latter.

Aside from the over-build measure, Dungao told The STAR that another measure that will greatly help existing operators to survive is the Cable TV Signal Theft bill which is scheduled for third reading in both houses of Congress next month. “It is good as approved,” he said.

It is estimated that there are 1.5 million paying CATV subscribers, and another 1.5 million that have illegal connections.

Dungao said that the local CATV industry is losing about P5 billion to 6 billion in potential revenues every year. Putting a stop to cable signal piracy would easily double the industry’s yearly revenues to P10 to P12 billion every year, he added.

During the convention, Vice President Noli De Castro said he supports the enactment of both the cable signal theft bill and a comprehensive cable TV act.

De Castro noted that there is no comprehensive legal network at present that governs the operation and development of the local CATV industry. “There are 1.5 million paying CATV subscribers, yet, there are more which are non-paying. This means not only huge losses for the operators but also for the government in terms of taxes,” he said.

He stressed that cable piracy theft has become rampant and is threatening the very survival of CATV operators. “Government and industry should work together to put a stop to this,” he said.