May 2013

BUSINESS NEWS

TAXMEN PROBE NAGPUR MSOS

Prior to implementation of D AS, Nagpur paid tax on 1.46 Lakh Cable TV homes . Post DAS Phase-2, over 5 Lakh Cable TV STB s have been installed.

As a result, tax authorities have already conducted surveys at the premises of 4 Nagpur MSOs - UCN, IN TV, BTN and GTPL.

Chief commissioner of income tax D N Saxena confirmed the action. According to preliminary estimates by income tax officials, these MSOs may have been under-reporting almost 70% of their income by not disclosing the actual number of connections. The MSOs will probably point out that the lower analog connectivity was due to lower declarations by the LCOs and not MSOs.

An income tax survey is an operation that can also be conducted by regular assessing circles of the department. As against this, the search and seizure operation which is more obtrusive action is carried out by the investigation wing.

In a survey the assets cannot be seized but the books can be impounded. The final assessment of tax liability is done after the officials carrying out the survey submit their report.

GREATER POWER TO TRAI ?

The communications ministry will soon seek approval from the Union Cabinet for granting more powers to the TRAI, enabling the regulator to act like a civil court.

The move will bring the telecom regulator on equal footing with other supervisory bodies such as the Securities and Exchange Board of India and the Competition Commission of India and allow it to penalise mobile phone companies. The TRAI will also be empowered to conduct periodic spectrum audits on mobile phone companies.

If cleared by the cabinet, the TRAI will be able to summon persons, examine them on oath, demand documents and evidence on affidavits, and, in appropriate cases, call for expert assistance in conducting inquiries.

I&B SEEKS CHANNEL STAKE DETAILS

The I&B Ministry has asked all television channels - general entertainment as well as news and current affairs - to furnish details of their shareholding pattern and equity structure.

The ministry has enquired whether there had been any changes in their shareholding pattern or any dilution made in their equity structure since the grant of licenses to them.

The immediate provocation for the I&B circular seems to be the collapse of the Saradha Group, which ran a clutch of television channels - Tara Muzik, Tara Newz and South Asia TV.

BCCI-NIMBUS: BANKS TO DEPOSIT 400 CR

The Supreme Court has instructed today asked Punjab National Bank, Indian Bank and the Union Bank of India to deposit Rs. 400 crore with the BCCI. This is to secure the BCCI's claim in a dispute over termination of the Rs. 1,600-crore contract between the cricket board and Nimbus Communications.

The order was against a Special Leave Petition filed by the BCCI, stemming from the banks' refusal to pay Rs. 1,600 Crore against the conditional bank guarantees issued by them for the 4 year Media Rights License Agreement (MRLA) between BCCI and Nimbus in 2009, for broadcasting the cricket matches.

In December, the BCCI cancelled domestic broadcasting rights given to Nimbus, due to default in payment.

If the case fails, BCCI will have to refund the amount, along with interest.

HATHWAY: BABU BOTTA IS EVPOPERATIONS

Hathway Cable & Datacom has appointed Jagadesh Babu Botta as executive vicep resident- operations.

Babu Botta has over 20 years of experience with Star TV, Channel [V], Radio City, Tata Sky DTH, News Outdoor, OOH Media (3i Private Equity) and Ignitee Digital (Astro Group).

INDIACAST VS HATHWAY-GTPL

Turmoil has arisen between IndiaCast Media Distribution and Hathway along with its affiliate GTPL - Gujarat's largest MSO. IndiaCast distributes 35 channels from the TV18, Viacom18, Disney UTV and A+E Networks. Hathway has cable operations in 140 cities and towns.

The IndiaCast-GTPL contract ended 31st March 2013 and IndiaCast wants lower carriage fees and higher subscriptions in its new contract. To complicate matters, the new contract coincides with DAS-2 kicking in, in Gujarat. IndiaCast alleges that both Hathway and GTPL want to maintain status quo by doing deals similar to that in the analogue era & even want to revisit phase I deals which were done on cost-persubscriber basis. IndiaCast has complained to the TRAI alleging abuse GTPL's dominant position in Gujarat.

IndiaCast's Gaurav Gandhi says that in its earlier analogue deal, it paid out more in carriage fees than it received in subscription revenues from GTPL.

BERTELSMANN TO REDUCE STAKE IN RTL

German media conglomerate Bertelsmann has confirmed plans to cut its stake in RTL Group, Europe's largest commercial broadcaster, by selling shares on the stock exchange but will continue to be the majority shareholder with atleast 75% stake.

Bertelsmann, which holds a stake of 92.3% in RTL with 7.7% in free float.

The company could raise $2.6 billion to $3 billion from the stake sale.

In India, RTL has a JV with Reliance Broadcast Networks (RBNL) and the Big RTL JV currently owns and operates Big Thrill channel.

NDTV COST CUTTING

India's oldest news broadcaster, New Delhi Television (NDTV), is reportedly in a massive cost cutting drive, to improve its financial health.

Measures include retrenchment & relocating some of Profit's back-end staffers from Mumbai to Delhi. In 2012, the company laid off close to 50 employees. As on December 31, 2012, NDTV employed 1,739 persons.

After 7 quarters of losses, NDTV posted a net profit of Rs. 14.87 Crore in the quarter ended December 31.

The problem with NDTV is that they do not have a bouquet of channels. Hence, getting advertisements is a challenge. NDTV Good Times (its Lifestyle Channel) has challenges with regards to diversity of content. n