Ending over 17 years of unregulated growth, the government will soon make it mandatory for all the 60,000 cable operators offering services in about 80 million homes to obtain a five-year licence by paying a one-time entry fee.
The licensing regime will be followed by strict industry regulations proposed by the Telecom Regulatory Authority of India (Trai) in draft recommendations issued today that could earn the government revenues of Rs 60 crore to Rs 70 crore.
Acceptance of the draft recommendations is widely expected to benefit broadcasters who have faced serious problems with cable operators routinely under-declaring subscriber bases.
The extent of the under-declaration can be gauged from the fact that broadcasters get subscription revenues for only 20 million homes, a fourth of total cable homes in the country.
"This is what we have been pushing for over a long time. It will put some order in the industry and benefit all stakeholders," said a senior Star TV executive.
Welcoming the move, Roop Sharma, president, Cable Operators Federation of India (COFI), which represents cable operators in the big cities, said: "Mandatory licences and high entry fees for cable operators will go a long way towards bringing some order and transparency in this industry."
Industry experts said with proper licensing the industry will be able to tap finance from institutions and banks, which have been wary about offering loans to unregulated operators.
This is important for cable operators that need to switch from an analog to digital format in the face of the growing challenge from direct-to-home and set top box-based cable TV.
A Mohan, secretary, MSO Alliance, said: "We welcome this move because it will also lead to faster digitalisation of the cable industry."
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