BANGLADESH: Cable TV turns too taxing

Subscribers may have to pay up to Tk 600 a month, up from Tk 400 on average as a cascading effect of the spike in distribution charge, which all may not afford

The Daily Star
Wednesday, December 24, 2003

The New Year will greet about two lakh cable television subscribers in Dhaka with a hike of service charge for Zee Network, ESPN and Star Sports.

Worse threatens -- the channels might shut down, as the distribution rate will increase 60 percent for Zee Network and 75 percent for the two sports channels.

Cable operators fear the subscribers may have to pay up to Tk 600 a month, up from Tk 400 on average as a cascading effect of the spike in distribution charge, which all may not afford.

"I have spent Tk 25 lakh on equipment to run the business. I cannot afford to lose," a cable operator said.

Currently, the rate for 17 pay channels is Tk 160 a month and cable operators pay 15 percent VAT (value-added tax) and an additional 15 percent supplementary duty: an operator pays the distributor about Tk 220 a month for a pay channel package, plus the monthly maintenance cost of Tk 150.

Nationwide Communications Limited (NCL) is marketing and distributing all foreign channels except HBO, which is done by Translink Limited in the city of 1,000 feed operators and about 40 cable operators.

The cable operators accused the NCL of monopolising the business and increasing the rate of pay channels without considering the affordability of viewers.

The rates of Zee and Sony channels increased 80 percent and 90 percent in January-April; and although the rates of ESPN and Star Sports increased to Tk 46.00 from Tk 20.80 in November, the NCL is again insisting on an increase by January, a cable operator said.

"Bangladesh is considered in the Indian zone. The rate in India for pay channels is Rs 100 a month, fixed by the government. Accordingly, the rate in Bangladesh should be Tk 120 for all pay channels," another cable operator said.

Bangladesh with about 10 lakh subscribers, 3,000 feed operators and 400 cable operators pays about Tk 5 crore in foreign currency for all pay channels every year.

The distributor is increasing the pay channel rate without limit, as the government has not drawn a margin on the rates of distribution.

But an inter-ministerial meeting was held on December 10 to frame a law to impose curbs on runaway cable business, sources said.

"Pay-channel business has become a business of hoodlums. If anybody speaks against the price hike, the distributor will stop providing the channels to the operator," another operator alleged.

The Awami League government introduced a 15 percent VAT on the monthly renewal of foreign pay channels and the BNP government slapped 15 percent supplementary duty on the renewal of pay channel contracts with the distributor.

A cable operator has to pay the distributor about 32 percent tax for the renewal of pay channels on top of the monthly rate. But the distributor does not give any receipts to the operators in return.

Attempts to contact the NCL for comments proved futile.