Cable TV operators seek moratorium on new licenses

MANILA, Philippines - Cable television (CATV) operators have asked the National Telecommunications Commission (NTC) to impose a moratorium on the issuance of licenses to new CATV companies to avoid over competition in an industry reeling from the effects of rampant cable signal piracy.

Philippine Cable Television Association (PCTA) president Leo Wong said CATV operators “are asking the NTC to stop issuing provisional authorities to new cable TV companies, particularly in areas that are sufficiently served by existing cable firms.”

He said an area should only have a maximum of three CATV operators to allow them to realize a return on their investments within a reasonable time frame.

Wong added that areas with less than 2,000 subscribers should only have one operator to maximize the cable infrastructure built in the area.

He pointed out that aside from stiff competition with other operators, cable firms are also suffering from high revenue losses due to rampant cable signal theft especially in the urban areas.

The PCTA head estimates that there is a 1:1 ratio on the extent of CATV signal theft in the country. This means that if there are around 1.8 million paying cable subscribers nationwide, the number of illegal cable TV users is also about the same. This translates to losses to the local cable industry of around P6.5 billion annually, given an estimated P3,600 a year losses for each illegal subscriber.

With the increasing saturation of key areas for CATV operators and the rampant signal theft, cable firms are now encouraged to bundle other value-added services like Internet connection to their conventional broadband service offerings.

PCTA vice president for Luzon Arnel Merilleno said more cable firms are now venturing into offering broadband service in Mega Manila and key cities nationwide, adding his business seems to be more profitable now than CATV.

However, he said the entire cable industry is still not ripe for this kind of service offering since the broadband business requires huge capital that most of the cable firms cannot come up with.

“We cannot compete with the rates that big telecom firms are offering for broadband service especially if we will be bundling Internet with CATV,” he added.

Meanwhile, during yesterday’s Cable TV Congress, NTC commissioner Gamaliel Cordoba revealed that they are already starting preparatory work for the entry of digital television in the country.

He noted that although much of the country is eagerly anticipating the introduction of digital TV service, other sectors see the entry of the same with guarded optimism.

“I would not be surprised if the local cable TV industry is preparing for the digital revolution.

In as much as digital television may impact on the cable TV business, broadband may be the key for the CATV industry on softening this impact. Enhancing your cable TV business thru the optimization of broadband technology would certainly complement your current cable TV service,” Cordoba said.

He noted that broadband deployment is a key step in the information and communications technology (ICT) sector’s role in spurring economic growth and finding the country’s proper niche in the global information economy in the 21st century.

Although broadband service can now be accessed, Cordoba said the availability of broadband facility is concentrated in urban areas and needs to be dispersed all over the country.        – Mary Ann Reyes