Case Study - Potential Diversification Strategy for Electronic Media Companies: Provision of Converged Services (Information, Communication, Multimedia

& other ITeS Services) in Pakistan Phase-I

Abasyn University-Islamabad Campus February, 2013 Submitted to Ms. Iffat Chaudhry by: Fawad Ahmad Khan Niazi MS (Management Sciences) Email: niazi.fawad@gmail.com

I dedicate this project report to my seniors/employer especially Mr. Muhammad Shamim, Mr. Noor-ud-Din Baqai, Mr. Mudassar Hussain & Dr. Syed Ismail Shah- who guide me throughout my career and provide me the opportunity to learn and grow.

Synopsis of Electronic Media & Telecom Sectors and Potential Strategies of Electronic Media Companies (EMCs):
The focus of the study is potential diversification strategy of Electronic Media Companies (EMCs) providing the multimedia services using different mode of delivery in Pakistan. The content, networks and devices are three building blocks of future business propositions to tap customers for innovative services in future.

The companies are striving to position themselves in a way that best suit their business strategies. In the existing scenario, the business model of these EMCs is dependent on market intermediaries Retailers/Distributors (DVDs/CDs, Cable), Internet (satellite & Internet Service Provider-ISPs/telecom operators), Content Aggregators (e.g. Mobile TV/IPTV Platforms) other pay-TV etc. The EMCs are further facing the risk of dependency, especially on telecom operators in near future and long run. The telecom operators are not only diversifying in the other sectors of health and financial services sector but also serving as content aggregator by simply provi ding the platforms to upload the user generated content and getting the existing original professional content transformed into the form suitable for delivery to mobile, TV and PC/Tablets of their huge customer-base. e.g. Orange, part of the France Telecom Group, supports several MVNOs in France, its home market, including i) Virgin Mobile, which recently incorporated two quad-play offerings and is regarded as one of the most thriving full MVNOs globally. Its subscriptions totaled more than 2 million at the end of 2011; ii) The M6 MVNO of Metropole Television, the third most-watched TV network in the country iii) NRJ Mobile, a 90/10 joint venture between banking corporation Credit Mutuel-CIC and multimedia group NRJ. Like Virgin Mobile, NRJ targets the youth segment. It had 900,000 subscribers at the end of 2011. Although the adoption rate of converged services is low in Pakistan but there is huge potential of uptake. It is generally understood that benefits can be extracted by Electronic Media Companies (EMCs), if they diversify their business portfolio through vertical or horizontal integrations as well as synergic alliances.

In Pakistan Electronic Media companies have already following the strategy to provide diversified services e.g. breaking news services to mobile users that may also serve the purpose of emergency alert but in the ever increasing instances of blocking of mobile and landline phones, there should be options available to people to at least have access to useful information. EMCs may be better poised to provide innovative services to people of Pakistan using its internal capabilities and development of customized end user terminal devices. For example, EMCs may also be able to provide the breaking news/emergency alerts through broadcasting over mobile phone using FM Radio Mode or Broadcasting to customized mobile phones with the simple TV reception capabilities. This will not only provide better coverage but also better market power and value of firm. The policy and regulatory environment in Pakistan related to electronic media/broadcasting services has certain limitations for the organizations having foreign equity; whereas, the telecom sector in Pakistan allow 100% foreign equity and being governed under light touch regulations for IT & Telecom (ICT) services (Ref. WTO-GATS Commitments and PEMRA Ordinance, 2002). Only PTCL has the IPTV license from PEMRA due to its unique position as its majority shares are still with Government and public at large. The available telecom sector infrastructure (http://www.pta.gov.pk/digitalmaps/ digitalmaps.php) can also be leveraged by CMEs through external networks/alliances or diversified telecom business unit. The detail about media sector licenses is at Annex-I; whereas, related telecom sector statistics are as under: Fixed lines (Net Landline based IPTV Market) Mobile lines (Mobile TV Market) Total Broadband Subscribers (Existing Landline IPTV Market)
Source: http://www.pta.gov.pk

~6-7 Million ~120+ Million 2.01+ Million

The growing demand of content and its regulations over internet and mass media are also challenges for the TOs as they are less familiar to such type of situations in contrast to EMCs and in some cases compliance to content regulations resulted in total blocking of key portal services e.g. YouTube and facebook on whom Telecom operators (TOs) rely for professional as well as user generated content. The power of mobile as end-user device/terminal; and necessity to have access to mobile device for tapping youth and busy customers requiring mobility in future is acknowledged worldwide. Therefore, EMCs should strive to provide converged services to mobile users in Pakistan through diversification strategies like that of telecom operators to sustain in long run.

Reference, the future outlook of industries depicted by Economic Intelligence Unit after a recent survey, the telecom sector has not gone into negative zone, rather the media/entertainment sector has already gone into negative zone. Therefore, it is imperative for the EMCs to adopt an innovative strategy to enter the domain of convergence instead of waiting for the convergence where they will be weak-link in the market and would be forced to accept the business terms of powerful telecom operators.

The multichannel approach of EMCs and web-portal for customer interactions may provide a converged platform for multimedia content publishers/producers to meet consumers where they are and generate the revenue that stakeholders need to remain successful in todays world of wideranging media distribution. EMCs may serve as content aggregator with focus on specific needs of the people of Pakistan and for the purpose; Government support may also be available from entities like National ICT R&D Fund Company (www.ictrdf.org.pk). In a recent survey conducted in Islamabad/Rawalpindi, under the supervision of Dr. Zaheer Akhtar, regarding the perception and preferences of users (in 20-35 years age bracket) about the IPTV services certain aspects including key factors affecting decision to buy the IPTV service, preferred choice of brand/operator and end user devices; following trends are noticed:
No Response Computer Mobile TV No Yes 0% 20% 40% 60% 80%

Others Qubee Witribe Nayatel Wateen PTCL 0% 20% 40% 60% 80%

Likeness to buy/continue to use IPTV service from existing B.B. Service Provider & Prefered Display Device

Broadband Service Provider

The above results show that innovative services like IPTV and market is still in intermediary stages of transition to convergence & moving from computers and TVs to mobile devices; however, people are yet to fully adopt mobile for mobility and still prefer to have IPTV services using TV device. Moreover, IPTV users would like to buy services from new service provider, if given choice. Moreover, it is also transpired that currently majority of customers are using broadband services from PTCL; however, there are around 2 million broadband customers and PTCL has only capacity of 4-5 million users and it is expected that future of broadband and broadband based services will be dependent on wireless technologies. Therefore, EMCs should diversify at this intermediary stage to provide the related converged products & services to the people of Pakistan while preparing them to face the challenges being imposed by the diversified companies in all mobile stage.

Proposed Strategy:
Almost all telecom operators are heading towards the provision of converged services with some limitations that might be the strength of the CMEs business case. In a recent survey available at http://www.informatandm.com regarding the future of companies diversifying to provide bundled ICT and ICT enabled services in the capacity of Mobile Virtual Network Operator (MVNO); the ethnic and retail segments are still at top but other segments like media and entertainment and device/machine to machine (enabling platforms) also have huge potential.

The following results of the survey also showed encouraging sign for the EMCs in the MVNO business proposition that will support the vertical sectors in their core business.

In view of above and enabling provisions in the IT & Telecom and financial services sector policies (Annex-II) under which interested EMCs can provide enabling platforms and voice, data, Multimedia & ICT enabled services (ITeS) through following complementary strategies in phased manner: Step-I: Provision of enabling platform of Professional and UserGenerated Content Aggregation in the capacity of Content Aggregator; Step-II: Provision of enabling platform for telecom network agnostic ICT enabled services such as E-Health, E-Education, IPTV, branchless/mobile banking services in the capacity of Third Party Service Providers (TPSP); Step-III: Depending upon level of aggressiveness and confidence in internal capabilities of the EMC; following two strategies may be adopted: o Provision of voice, video and data services on mobile devices (mobiles/tablets) through SIMs with their own brand in the capacity of Mobile Virtual Network Operator (MVNO); OR o Provision of converged services in the capacity of Mobile Network Operator (MNO) by acquiring the license and spectrum in upcoming auction of 3G spectrum and Infrastructure Sharing & Roaming Agreements with existing operators

Hypothesis:
Considering the analysis given above and enabling provisions of IT & Telecom Sector De-Regulation Policies, available infrastructure and strong viewership of EMCs in Pakistan; If Converged Services (Information, Communication, Multimedia and other IT enabled services) be provided through diversification of Electronic Media Companies (EMCs) instead of telecom operator, then it will ensure EMCs sustainability and competitive edge in era of convergence of media and services. The preference of potential customers in terms of content, end user device and choice of service provider/brand have been studied in separate survey; however, this study will focus on literature review in instant phase and in next phase, the perception of the industry experts and corporate level management would be gauged about the proposed strategy of EMCs identified above as well as readiness/enthusiasm of the EMCs to adopt them. The optimistic approach of industry experts and EMCs corporate managers will be taken as strong positive link between media sector diversification towards the ICT/ICT enabled services and long terms sustainability and competitive edge and vice versa. The views of focused

group of experts/corporate level management will be gathered through interviews/questionnaires.

Literature Review:

There are two aspects of diversification (i) Internal-what are the chances of making it success through ability of the diversifying firm to organize and make good use of potential opportunity in the market; and (ii) external-how well will a particular move, if it be successful, meet the companys objective (Igore Ansoff). The optimism of experts and decision makers keeping in view the both of these aspects of proposed EMCs diversification strategy would be the critical diversification strategy adoption factor in Pakistan. The EMCs should take initiatives to broaden the companies technological base as well as horizontal move to improve the coverage of the market. Companies usually strive to attain the best performer position by starting new industry or transforming the old ones into mutated firms to create/meet consumer preferences. Media sector have the option of vertical and horizontal integration so do the telecom operators. It is the matter of time when business environment and user preferences will be changed for service providers due to concentration, convergence of services and delivery mechanism (Infrastructure). There is a convergence trend in telecommunication and media sectors as well and there is a link of it with concentration being experienced in almost all sectors for sustainability. The understanding of convergence and integration is critical to move further in adoption of any diversification strategy in media and Information & Communication Technology (ICT)/Telecom sector. According to industry and European ICT market regulatory expert-Mr. Miguel Mendis (DG Competition Media Unit in his presentation given on Media, Information and Telecommunication at Oslo in 2003); there are two basic type of convergence/integrations (i) Technical Convergence i.e. possibilities offered by the digital technology e.g. capabilities of ICT Infrastructure required to deliver the content including the processing power of end user terminal/devices. This has resulted in the de-materializing the media products by transforming them into digital form to remain in the main-stream business. Now the traditionally separate media has been converged as Multimedia i.e. putting together of the text, sound, video and voice. This convergence can be witnessed in Pakistan where news papers are available over internet (web-casting) as well as same content is available on their news TV channels (diversification as Electronic Media Company from Newspaper Group) as well as through the subscription on mobile (Breaking News Alert, Ring tones/MP3 music file downloads). Definitely much more is to explore and leveraged by the media companies in near future and long run. The price paid for the rights of live matches and other media products are increasing and availability of international content in local language is also worsening the situation and making it more important to diversify in the context of

second type of convergence i.e. (ii) economic convergence. Growing competition induced by the proliferation of TV channels and inflated cost of production worldwide as well as in Pakistan; only the broad based innovative firms seems to be able to afford the such abnormal costs. In the face of the economic barriers of such dimensions, media companies have shown trends of concentration in foreign markets and may have to be done by the Pakistani media companies to gain efficiencies and competitive edge through economy of scale and scope. This is being reflected in international markets in the form of Entertainment & Telecommunications; Entertainment & Information; Information & Telecommunications etc. This trend is being witnessed due to potential of reducing average cost by producing the wide range of products through vertical integration of different levels of production and distribution of media products. The vertical integration strategy of media and telecom sector leads to creation/transformation of companies which are able to produce content-films, drama, music; register them in CDs/DVDs and distribute them not only through physical outlets/distributors but also through cable, satellite or internet (wire line or wireless/mobile internet) they own; and better positioned to exploit their products at every single level of value chain. The market structure is perfect for the content aggregators to play a role in packaging the content, depicted below, while resolving the content licensing/IPR issues (Ernest & Young.Generating Money in a mobile TV world(2006).

EMCs may diversify to become content aggregator-cum-broadcaster and strategy of acquisition is more common than through internal development (Levitt, 1975); however, it is also observed that acquisitive growth strategy may affects the Managements time and risk orientations and may reduce the Managers commitment to innovation (Michael A. Hill & Robert Hoskisson, 1990). Therefore,

media companies should diversify their business through vertical integration to promote innovation and gain social capital to grow in the digital convergence era as the absolute size of acquired knowledge base has short term positive effects and in later stage, there might be negative effects on the innovative performance of the acquiring company. The companies should target the mergers and acquisitions partners that are neither too un-related nor too similar in terms of their knowledge base (Myrian Cloodt, John Hagedoorn & Hans Van.Mergers and Acquisitions: The effect on the innovative performance of companies in the high tech industries, Research Policy 35, 2006:642-654). The role of manufacturers is also very important for the customization of end user terminals/devices in terms of feature and capabilities required by the telecom and media companies; however, without the strong content (including the user generated content), consumer will not pay for any mobile video services and service provider would end up as white elephant. Therefore, companies need to offer the more compelling products and services than the competitors to succeed. Mutually beneficial partnerships between the content and delivery groups, enabling them to succeed and sustain in long run are essential. It is pertinent to mention that such a partnership would likely to happen between some strong-link and weak-link in the complementary sector wherein EMCs would have to be a strong link either in content or delivery domain with ability to enforce intellectual property rights. Intellectual Property Rights (IPR)/Content usage rights do not specifically include the re-transmission of digital products over the internet/mobile networks; media companies and broadcasters will need to review carefully all content before it broadcast, including the accompanying music. Content owner will want to audit the process to verify that their IPRs are not being mis-appropriated. Moreover, the core to success of video services over mobile handset/devices whether by operators alone or strategic partnership will be original, bite sized content and would be different from the content distributed to consumer on TV in their living rooms. Content should be specifically generated and all content creators are operating n slim margins. The content made for TV would have to be re-purposed to save cost and there is need of creation of platforms and device specific content. Moreover, the user generated content (blogs, video blogs, social network & video sharing) will be as significant as the professional content. Consumers are displaying increasing trend of viewing user-generated content and EMCs are also trying to encourage the people to upload/share videos on their web-portals. It is anticipated that the 3G enabled video services by telecom operators would get benefit by promoting web-portals with user generated content to outperform the professional content providers. The popularity of such portals e.g. YouTube (Broadcast Yourself) and its strong technical base and natural disposition with telecom operators pose serious challenges to media and entertainment business entities to generate income from user generated content as well, which is likely to be captured by the mobile operators or MVNOs (increasingly popular). The viewers will be driven by the brands they know and trust.

Hence content owners and general user would prefer to upload/share on platforms of professional content aggregators who can provide space and transform the content into digital form for further deliver the same to interested consumer on demand through multiple routes with option of revenue sharing. In current scenario, the traditional broadcasting channels would not be able to provide the ondemand services or other content management/controlling facilities that telecom operators are and would be able to provide using broadband/internet as delivery channel and state-of-the-art television and mobile devices. EMCs should be able to tap the opportunity of leveraging the potential of original content-professional as well as user generated and be able to deliver it to the consumer seamlessly on demand through digital technology, preferably owned/managed by them with fair revenue sharing facility. Managing critical dependencies, vertical integration may be the approach due to the foreseeable future dependencies (Gorden A. Walter, Jay B. Barney, Management Objectives in Mergers and Acquisitions. Strategic Management Journal, Vol-II, Issue-I (Jan 1990), 79-86. The media firms, like other dominant vertical firms that happened to evolve into related diversified firms over the time, can start to evolve from simple narrow industry base to a stage of becoming larger by gradually expending into firms, diversified into related industrial sectors (Levitt, 1975). Through this strategy, there are possibilities of greater market brand power and performance by pursuing the related diversification strategy (Bettis, 1981), (Backaitis, Balakrishnan & Harrigan, 1984), (Palepu, 1985). It is also observed that diversification has significant positive effect on the value of the firm (Jose, Nichols & Stevens, 1986). However, it is important that diversification strategy should be implemented with greater involvement of the management in corporate level planning and control arrangements (Hill and Horkisson, 1987) as the performances of diversified firms depends on the fact that how diversity is managed. Regarding management of diversification; the instant study proposed MVNO model which is an established model whereby media sector may diversify to provide new innovative bundled services in the capacity of content producer-cum-aggregator with minimum involvement in the network deployment/management. In the same way, a little variant of the MVNO i.e. VLO (Virtual Landline Operator) services may also be started by the media companies to capture the market segment connected through the wire-line operators. In view of above, it is reiterated that EMCs must consider the latest trends and adopt an innovative strategy to enter the domain of convergence instead of waiting for the convergence where they will be weak-link in the market and would be forced to accept the business terms of powerful telecom operators.

REFERENCE CASE STUDY WHAT IF MEDIA COMPANIES DO NOT RESPOND TO THE NEED OF DIVERSIFICATION PROACTIVELY: MOBILE IS MAKING IN-ROADS

m-commerce limited opportunity for mobile but good for interactive TV screen

Annex-I Related IT & Telecom Sector Policy Reforms Policy Maker-Ministry of Information Technology Regulator-Pakistan Telecommunication Authority (PTA) Introduction of 3G is expected to provide more robust ICT infrastructure for provision of converged services; Spectrum auctions of available frequency lots in 3G spectrum, 1.9 GHz and 3.5 GHz bands is expected soon and watch-hold on new licensing is also expiring in March, 2013; therefore, CMEs can participate in the auctions to acquire the license depending upon the strategy; Policy for security and improvement of national telecom and information services through inter-operator network redundancies that will ensure the compliance to service level agreements among the stakeholders especially in case of critical services; Policy on Mobile Banking including mobile money transfer and remittances Policy on content over Internet whereby web management regime has been introduced in line with Federal Cabinet decisions. International Commitments http://www.wto.org/english/tratop_e/serv_e/serv_commitments_e.htm Related Broadcasting Sector Policy Reforms Policy Maker-Ministry of Information & Broadcasting Regulator-Pakistan Electronic Media Regulatory Authority (PEMRA) Under Section-23 of PEMRA Ordinance 2002/ PEMRA (Amendment) Act 2007 no person shall be entitled to be benefitted from any monopoly or exclusivity in the matter of broadcasting or the establishment and operation of broadcast media. The Authority has approved following restrictions on the acquisition of broadcast media and distribution services: (i) No distribution licensee including Direct-to-Home (DTH), Cable TV (CTV) Networks, IPTV, Multi-Channel Multi-Point Distribution Service (MMDS) etc. will be allowed to own, control or operate any type of broadcast media or/ and Landing Rights Permissions.

(ii) No media broadcast licensee including Satellite TV, FM Radio Licensee or Landing Rights Permission Holders will be allowed to own, control or operate distribution services such as Direct-to-Home (DTH), Cable TV (CTV) Networks, Multi-Channel Multi-Point Distribution Service (MMDS), IPTV etc. (iii) However, Cross media ownership is allowed since 2007. Related Branchless Banking Regulations Policy Maker-Ministry of Finance Regulator-State Bank of Pakistan Branchless Banking Regulations http://www.sbp.org.pk/bprd/2011/C9-Enclosure2.pdf ANNEX-II EXTRACTS FROM PEMRA YEAR BOOK Satellite Television Channels: Satellite television is the provision of broadcast services through satellite. It provides a wide range of channels and services, often to areas that are out of reach of terrestrial transmission. Two kinds of frequency bands namely C band and Ku band are used for satellite TV. Pakistan, in recent years has become a hub of media growth; where not only local TV channels have emerged but the foreign TV remaining 16 are non-operational. Five public sector channels are also on-air. All these channels are available in the form of a bouquet to the subscribers. Meanwhile eleven registered companies hold the landing rights permission for marketing and distributing 26 Satellite TV Channels across Pakistan. The table below shows total number of private Satellite TV channels holding licenses from PEMRA. Channels have also witnessed a rapid growth in their viewership. The foreign channels intending to relay their transmissions in Pakistan have to obtain landing rights permission against a prescribed fee ranging from Rs. 0.3 Million to Rs. 5.0 million depending on the category of the channel. Currently 85 private Satellite TV channels have been granted licenses by PEMRA. 69 channels 69 channels out of 85 are operational while remaining 16 are non-operational. Five public sector channels are also on-air. All these channels are available in the form of a bouquet to the subscribers. Meanwhile eleven registered companies hold the landing rights permission for marketing and distributing 26 Satellite TV Channels across Pakistan. The table below shows total number of private Satellite TV channels holding:

Uplinking: Uplinking means the transmission of a signal from a ground station on Earth to a satellite. Short-term and long-term uplinking permission has also been granted to different companies in Pakistan. Currently three news agencies namely; M/s Asian Television Press Network Pvt Ltd, M/s Eastern News Pvt Ltd, and Classic Entertainment Pvt Ltd, hold long-term uplinking permission for one year while following four companies have been granted short-term permission, M/s Faizan Production Pvt. Ltd.(Madni Channel), M/s GAAZA Broadcasting System Pvt. Ltd.(GKABOOM), M/s Indus TV Networking Pvt. Ltd. (Indus News) and M/s Birds Pvt. Ltd. (Geo Super) Cable TV: Over the past decade Pakistan has been flooded with new cable and satellite television channels. The cable TV trend in Pakistan dates back to 1990 when, a house owning a satellite dish started sharing broadcasting signals to its neighbours. Pakistan Electronic Media Regulatory Authority (PEMRA) took over the role of regulator, in 2002, from Pakistan Telecommunication Authority (PTA).

FM Radio Broadcasting: Frequency Modulation (FM) Radio broadcasting uses a specific range in between 88 to 108 MHz band and has the capacity to provide high quality Audio programmes within a specific radius of around 40 to 50Kms. Any company having interest in broadcasting FM Radio transmissions has to contest a bidding process besides completing other formalities. The licensee is bound to air public service programmes free of cost which may be provided by the Authority in the interest of the masses. Any company holding FM Radio license has to ensure an interruption free broadcasting to its listeners. PEMRA has granted 138 FM Radio licenses out of which 114 licenses are commercial while 24 are non-commercial. Amongst the 114 commercial licenses 94 are operational while 20 are still nonoperational. Whereas out of 24 non-commercial licenses, 21 are operational. Internet Protocol TV (IPTV) Channel Distribution Services: Internet Protocol Television (IPTV) is a relatively new method of delivering and viewing television programming using an IP network and high speed broadband access technology. It is a combination of three mediums called triple play service involving TV, internet,

and telephone. M/s Pakistan Telecommunications Company Limited is the only company currently holding IPTV license which is operational in Pakistan. Mobile TV: It is latest technology to provide TV services on mobile and hand-held devices. Presently three Mobile TV licenses have been issued to M/s Brands Promotion Centre Pvt. Ltd., M/s Cellevision Pvt. Ltd., and M/s Dialogue Pvt. Ltd. This medium is expected to get a steep boost in Pakistan. Telenor and Mobilink are the two cellular companies currently providing this service to their customers in Pakistan. Multi-Channel Multi-Point Distribution Service (MMDS): MMDS is also known as Wireless Cable. It is a wireless telecommunications technology, used for generalpurpose broadband networking or, more commonly, as an alternative method of cable television programming reception. Pakistan started this service in 1996 initially with 10 TV channels which was later, upgraded to more than 80 channels. TV transmissions through MMDS are being watched in Karachi, Lahore, Islamabad, Sahiwal and Okara. Three companies namely; M/s Ranja Enterprises Pvt. Ltd, Lahore for Sahiwal & Renala Khurd, M/s Southern Networks Limited, Islamabad for Lahore, Karachi & Islamabad and M/s Pak Communications (Pvt) Ltd, Islamabad for Nankana-Sahib hold MMDS licenses in Pakistan. Due to rise in subscribers the estimated number of MMDS subscribers has reached to 330,500. Direct-To-Home (DTH): Direct-to-Home satellite television service is the method of direct reception of TV channels. Through this service, subscribers or end users, receive signals directly from geostationary satellites. Signals are broadcast in digital format at microwave frequencies. DTH service enables customers to receive TV programmes directly from the satellite through powerful Ku band transponder. Licensing Regime for the award of DTH licenses including eligibility criteria, terms & conditions, bidding procedure etc. is in process and will be finalized in near future. PEMRA POWERS & REGULATIONS: Broadcast media means, the media which originates and propagates broadcast signals by terrestrial means or through satellite for radio or television and includes teleporting, provision of access to broadcast signals by channel providers and such other forms of broadcast media as PEMRA specifies. PEMRA also regulates distribution services for broadcast in Pakistan established for the purpose of international, national, provincial, district, and local or special target audiences. Distribution Service denotes to the receiving of broadcast and prerecorded signals from different channels and distributing them to subscribers through cable, wireless or satellite options including Cable TV, Local Multi-point Distribution Service (LMDS), Multi-channel Multi-point Distribution Service (MMDS), Direct to Home (DTH) and such other similar technologies.

To promote a healthy competitive environment and discourage monopolies, PEMRA prescribes terms and conditions for the broadcast media and distribution service operators. For instance, no one can own more than four TV channels. Unfortunately cross media ownership is allowed since 2007 in contradiction to international practices. Note: It is also clarified from PEMRA expert that there is no bar of having telecom sector license or MVNO authorization, if you are a media company. Further clarifications can be sought during feasibility stage. PEMRA issues licenses for broadcast media and distribution services in the following categories:i. International and National scale stations ii. Provincial scale broadcast iii. Local Area or Community based Radio and TV Broadcast iv. Specific and specialized subjects; v. Distribution services vi. Up-linking facilities including teleporting and Digital Satellite News Gathering (DSNG). The Authority may revoke or suspend the license on non-payment of renewal fee or on the violation of any of the provisions of PEMRA Ordinance. The Authority has the exclusive right to vary any of the terms and conditions of the license or grant exceptions where it finds it appropriate in the public interest. Related PEMRA Authority Decisions: Meetings of the Authority were held between July 2009 to June 2010 in which many important and constructive decisions were taken some of which are given below. (a) The Authority in order to negate monopolies in the private electronic media has decided not to issue more than four (04) STV licenses, four (04) FM Radio licenses and two (02) Landing Rights Permissions, to a single company. (b) The Authority after due considerations has also approved the tariff, terms and conditions for the In-House channels for IPTV services and MMDS licenses. (c) The Authority has imposed heavy fines on non-compliance with the terms and conditions regarding maintenance of minimum standards, set by the Authority to air advertisements by the satellite TV channels to protect viewers rights. (d) The Authority has also approved to decrease the Landing Rights Permission fee from Rs. 50 million to Rs. 20 million. (e) In order to bring PEMRA Rules in line with the amendments introduced in PEMRA Ordinance, 2002 by the Parliament of Pakistan in April 2007, the Authority, with the approval of the Federal Government, has formulated PEMRA Rules, 2009.

(f) In order to make the complaint mechanism more efficient and effective, Council of Complaints (Organization & Functions) Regulations 2002 have been reviewed. In this regard a draft of PEMRA (Council of Complaints) Rules, 2010 as approved by the Authority has been sent to the Federal Government for necessary approval and promulgation as provided under the Rules of Business, 1973. On notification of these Rules, the Council of Complaints (Organization & Functions) Regulations, 2002 shall stand repealed. (g) The Authority approved the insertion of following clause in the terms and conditions of the new Cable TV licenses, revalidation, renewal and up-gradation cases; In the case of metropolitan cities, the license is revalidated inter alia on the condition that the licensee shall convert its system from analog to the digital technology to the satisfaction of the Authority by the end of year 2011. Whereas, in case of other cities, time frame for digitalization of Head-ends/ distribution system is to be completed by the end of year 2015. In case, the licensee fails to shift from analog to digital technology as required, the license shall be deemed to have been withdrawn/ cancelled by following the process of revocation of the license. (h) The Authority has decided that under Section-23 of PEMRA Ordinance 2002/ PEMRA (Amendment) Act 2007 no person shall be entitled to be benefitted from any monopoly or exclusivity in the matter of broadcasting or the establishment and operation of broadcast media. The Authority has approved following restrictions on the acquisition of broadcast media and distribution services: (i) No distribution licensee including Direct-to-Home (DTH), Cable TV (CTV) Networks, IPTV, Multi-Channel Multi-Point Distribution Service (MMDS) etc. will be allowed to own, control or operate any type of broadcast media or/ and Landing Rights Permissions.

(ii) No media broadcast licensee including Satellite TV, FM Radio Licensee or Landing Rights Permission Holders will be allowed to own, control or operate distribution services such as Direct-to-Home (DTH), Cable TV (CTV) Networks, Multi-Channel Multi-Point Distribution Service (MMDS), IPTV etc. (i) The Authority under Delegation of Power (DOP) has granted powers to Regional Councils of Complaints to levy fine up to one hundred thousand on all broadcast and distribution service licensees in accordance with the magnitude of their violations. (j) The Authority has approved the distribution/ provision of different channels of the same category/ genre in the form of bouquet/ cluster to the subscribers to ease up channel browsing.

(k) The Authority has decided not to issue any new Satellite TV licenses, especially to current affairs category until the market demands so.