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Zee may block signals to Hathway subscribers

The TV broadcaster alleges that Hathway has not been paying subscription fees since many months and it may have to terminate its content deal with the cable operator

Subscribers of Hathway Cable and Datacom Ltd’s TV cable network across Delhi, Mumbai and Pune may soon be unable to view channels from the Zee Turner bouquet. According to a release from Zee Turner Ltd, Hathway Cable subscribers from these cities will not be able to view around 33 channels offered by the TV broadcaster as Hathway has failed to pay subscription charges to Zee Turner.

“Despite the 21 days’ notice issued to Hathway on 15 January 2010, Zee Turner has exercised restraint in the interest of consumers, but the cable operator has been avoiding a resolution to the issue. Zee Turner is forced to look at the option of switching off the networks to protect the interest of its stakeholders,” said a Zee Turner spokesperson.

The channels that may go off air for Hathway customers include Zee TV, Zee Marathi, Cartoon Network, Pogo, HBO, CNBC TV 18, Zee Cafe, Zee Studio, Zee Cinema and 24 other channels.

Responding to an advertisement put up by Zee Turner in newspapers, Hathway’s president for finance and company secretary, Milind Karnik, said, “The advertisement contains the word ‘may’, which means that if we do not pay, then it will terminate the service. The negotiation is still going on. It (Zee Turner) is trying to create pressure by putting advertisements in newspapers.”

Last month, Zee Turner had issued a winding-up notice to Hathway, claiming pending dues of around Rs25 crore. According to media reports, Hathway’s Bengaluru division owes Rs3.5 crore to Zee Turner and its channels might not be available to these customers also if the operator does not pay up.

Zee Turner has also alleged that Hathway is not signing a new agreement even after it has been issued a public notice. The deal between the companies expired nearly a year ago, according to the Zee Turner spokesperson.

“Most of these agreements (for the Zee Turner bouquet of channels) expired in March 2009 and ever since, despite numerous efforts by Zee Turner, Hathway has not come forward to sign the agreements. Additionally, Hathway owes Zee Turner an amount of over Rs28 crore which is nearly six months overdue,” he said.

However, Hathway has a different explanation for the impasse. “There is a miscommunication of the deal amount between Zee Turner and Hathway, and that is the reason for not signing the deal. Once that gets sorted out, we are ready to sign the deal. We cannot quote the pending amount to be paid to Zee for Mumbai operations because in a few places, we have a joint-venture deal with other small cable operators,” said Mr Karnik.

Zee Turner also claims that there is widespread misreporting of subscriber figures in Hathway’s cable television business. “In the draft red herring (IPO) prospectus (of Hathway) filed with SEBI, they have mentioned that the total number of subscribers is nearly 2 million, and they are also advertising that they have 8 million subscribers; whereas for the cable business, they have declared only about four lakh (subscribers), thus concealing a large portion of their subscriber base,” said the Zee Turner spokesperson.

Earlier, ESPN Software (I) Pvt Ltd (ESPN) lodged a first information report (FIR) in the Janakpuri Police Station at New Delhi against Surinder Dhupal from Hathway for exhibiting and transmitting signals from ESPN without proper authorisation from it.

Hathway Cables is going through tough times; it had to wind up its cable TV operations in Chennai last year and is also facing operational problems in Tiruchirapalli. According to the red herring prospectus filed by Hathway for its ongoing IPO, Sun TV Network Ltd had filed criminal complaints against the company and its officers for copyright violations. 
 

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