Indian Co-Op Nips at Big MSO Heels

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New Delhi, India -- A cooperative set up by small operators
in central India is starting to make a dent in the customer bases of two large cable
companies there.

Representatives of the group, known as the Cable
Cooperative Society (COCO), said their systems have lured some 20,000 customers from two
of the country's most powerful MSOs -- Zee TV-backed Siticable and Hindujas-owned
InCable.

Of the 90,000 subscribers that the co-op's members
serve today, about 25,000 have been added since it was formed last October.

The losses for Siticable and InCable are actually larger
than just the switched-out subscribers -- the small systems in COCO used to be customers
of InCable and Siticable themselves, relying on the large MSOs to serve as their headends.

According to the COCO members, the large MSOs have reacted
to the situation with some arm-twisting tactics to lure operators away from the coop. And
InCable and Siticable are also reportedly offering to provide the system operators with
digital decoders at subsidized costs for use at the headend.

But the cost savings that the co-op boasts over InCable and
Siticable are noteworthy, according to Arun Udhyapak, an operator in the city of Ujjain.
"The MSOs have a sizable presence in the larger cities. But while they demanded [that
small operators pay them] 32 rupees [75 U.S. cents] per connection, COCO is charging
[operators] 23 rupees [54 U.S. cents] per connection," Udhyapak said. "This
allows us to charge less to our customers."

The driving force behind the co-op wasn't a cable
operator, but a financial expert, Janak Gandhi, who also owns the OTG cable network. His
own investment, and that of some Indian institutions, set up the initial cooperative fund
of some 3 crore rupees ($US714,000), from which operators can receive loans to upgrade
their equipment.

"Our cooperative has been granted a license whereby we
can provide Internet [access] to all of our subscribers," Gandhi said. "We are
working toward forming common telecommunications and cable circles by using convergence
technologies," such as fiber optic cable, which can provide television, telephony and
Internet services.

Today, the co-op encompasses systems in four different
cities in southern India, and a fifth -- Bhopal -- will be added in the coming weeks.

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