Maran brothers feel the heat as cable TV war intensifies

For long, media barons, Kalanidhi and Dayanidhi Maran, have ruled over one of the biggest media empires of India spanning more than 30 television channels in four languages covering over 95 million households.

After losing power and influence at the Centre and in Chennai, they may now be down but certainly not out as they got a breather from Madras high court on the Centre’s diktat that would have crippled their empire. The interesting battle promises to churn out more surprises as the brothers are known to be shrewd operators who can swim against the current without getting wet.

They have left a mark on everything they sensed, be it cable TV business, FM radio stations, newspaper, aviation or IPL cricket and it is chiefly, the 50-year-old Kalanidhi Maran, the chairman and managing director of Sun Group, who has been in the forefront for the last three decades.

Both Kalanidhi and Dayanidhi learnt the business art from their late father and former Union minister Murasoli Maran, who also happened to be a relative and close associate of DMK president M Karunanidhi.

Kal Cables runs the Sumangali Cable Vision (SCV), a part of the Sun Group, which is widely spread in Tamil Nadu, has mastered the art of luring subscribers offering several sops through attractive advertisements since it obtained a permanent licence in 2011.

The group’s other business interests include direct-to-home broadcasting, FM radio stations, daily newspapers and magazines. In 2013, Kalanidhi purchased the Indian Premier League’s  Hyderabad cricket franchise and named it Sun Risers. He also ventured into the airline business in 2010 by buying up SpiceJet.

Recently, the information and broadcasting ministry cancelled the registration of Kal Cable following the denial of security clearance by the ministry of home affairs. But it was business as usual at SCV office. “Why should we be worried about the cancellation of licences? Our boss (Kalanidhi), who has faced several business hurdles in the past, knows how to tackle this issue,” an employee of SCV seeking anonymity said. Those who have worked with Kalanidhi say his business brain is sharp.

When the whole country had written off the aviation sector, which was doing badly in 2010, Kalanidhi boldly went ahead and sued up the SpiceJet deal. His hunch has proved right. Not only has the industry bounced back, but the foreign airlines have been allowed to acquire up to 49 per cent in Indian carriers.

But fresh trouble has erupted for the direct-to-home (DTH) business. The Central Bureau of Investigation (CBI) recently filed a charge sheet in a Delhi court against the Maran brothers and Sun Direct TV, the company which offers DTH service to around nine million subscribers.

The case relates to sale of mobile telephony operator Aircel to Maxis, owned by T Ananda Krishnan, in 2006 wherein Aircel's original owner C Sivasankaran had alleged that he was pressured to sell as his firm was denied licences. The CBI has alleged quid pro quo saying that in return, the Malaysian company invested more than Rs 600 crore in Sun Direct, owned by the Maran family.

As per the court order, which said that the Centre was free to take action in respect of other violations, if any. If the concerned ministry goes ahead to take action against Kal Cable, it would be a big setback for the Sun TV group in Chennai as it would have to depend on other MSOs to reach its channels to households.

Looming uncertainty
In that case the fate of over 40 lakh cable TV subscribers and thousands of operators in the Tamil Nadu capital will hang in balance. The SCV customers have bought set-top boxes, which are mandatory to access digital cable signals. These boxes were priced at approximately Rs 1,500 each.

There are about 2,000 Local Cable operators (LCO) under Kal Cables, who provide cable television network services with a digital addressable system (DAS). “Each main cable operators would have invested between Rs 50 lakh and Rs 1 crore for purchasing various electronic tools including optic fibre cable, transmitters and other technical equipment,” Tamizhaga Cable TV Operators Association member P Shakilan said.

He said it was difficult for LCOs to switch over to other companies since they have to change the existing set up according to the organisation requirement, which will again cost several lakhs.

Kal Cables is the market leader and controls more than 60 per cent of cable operation business in Chennai, followed by other players like TCCL, Akshaya, Aadhar, Crystal and State-owned Arasu cable.

The other trouble that Kal Cables is now facing is from the Chennai Corporation that has already started removing the cables for non-payment pay track rent by the cable operators.

A corporation official said the rent, which was mere Rs 9,500 per km per year, was increased to Rs 32,450 per km per year recently. He alleged that the previous DMK regime had given privilege to Marans by not taking any action against them despite their non payment of track rent, which resulted in a huge loss to the municipal body.
Meanwhile the Tamil Nadu government has been urging the new NDA government at the Centre to expedite the issue of Digital Addressable System (DAS) licence to Tamil Nadu Arasu Cable TV Corporation (TACTV) at the earliest.

TACTV, which was revived by the Tamil Nadu chief minister J Jayalalitha soon after she came to power in 2011, launched its cable TV services in all 31 districts of Tamil Nadu, barring Chennai under conditional access system then. TACTV provides 100 channels to subscribers at Rs 70 a month, with over 24,000 local cable TV operators having a subscriber base of 65 lakh availing the service.

In June, Jayalalitha wrote a letter to prime minister Narendra Modi requesting him to issue the licence at the earliest, noting she strongly suspected “that the non-issuance of the DAS licence to TACTV by the previous UPA government was only to facilitate particular private business interests, as other licences were issued at the same time.”

Though she had written a similar letters for issuing licence to the UPA government headed by Manmohan Singh, there was no proper reply in this regard from the then government.In Tamil Nadu, the war for controlling the air waves has just begun.