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India – TRAI Issues Recommendations On Regulation Of Monopolies And Market Dominance In Cable Television Services.

27 January, 2014

 


On November 26, 2013, the Telecom Regulatory Authority of India (‘TRAI’) issued its recommendations ‘on monopoly/market dominance in cable TV services’ (‘TRAI Recommendations’). The TRAI Recommendations were issued in response to a reference by the Ministry of Information and Broadcasting seeking its views on whether any restrictions needed to be imposed on consolidation by multi system operators (‘MSOs’) and local cable operators (‘LCOs’) in the interest of fair competition and improved quality of services. Accordingly, on June 3, 2013, TRAI issued a consultation paper and invited comments from all stakeholders. Post the aforesaid comments and open house discussions with stakeholders, TRAI inter alia made the following recommendations:

 
i. The issue of dominance and monopolies in the TV channel distribution sector needed to be addressed to promote efficiency and facilitate competition;


ii. Market dominance should be measured solely by taking into account the market share of MSOs considering the state as the relevant market;


iii. Market concentration should be determined using the Herfindahl-Hirschman Index (‘HHI’), with the threshold value being no more than 2500;


iv. Based on the above determination, any merger or acquisition among MSOs or between an MSO and LCO must be scrutinized and cleared by TRAI;


v. Such prior approval of TRAI is also required in the event of acquisition of control over a MSO / LCO;


vi. Any MSO, which by itself contributes to more than 2500 HHI, should not be permitted to merge with or acquire ‘control’ over any other MSO / LCO. Also, the tariff offerings, interconnect agreements, must-carry provisions and the quality of service of such MSO would be closely monitored by TRAI for any anti-competitive practices; and


vii. The Cable Television Network (Regulation) Act, 1995 and the rules framed therein may be amended to incorporate the above restrictions on mergers/acquisitions / acquisition of control in the TV channel distribution sector.

 

AZB

 

For further information, please contact:

 

Zia Mody, AZB & Partners
zia.mody@azbpartners.com

 

Abhijit Joshi, AZB & Partners 
abhijit.joshi@azbpartners.com


Shuva Mandal, AZB & Partners 

shuva.mandal@azbpartners.com

 

Samir Gandhi, AZB & Partners
samir.gandhi@azbpartners.com


Percy Billimoria, AZB & Partners 

percy.billimoria@azbpartners.com

 

Aditya Bhat, AZB & Partners 
aditya.bhat@azbpartners.com

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