Cable TV industry lost P4 billion last year due to illegal connections, piracy

MANILA, Philippines - The local cable television industry lost around P4 billion in revenues last year due to illegal cable connections and signal piracy, according to the Philippine Cable TV Association (PCTA).

PCTA officials said signal theft has become so rampant they estimate that every legitimate cable TV line has an illegal connection because of “colorum” or illegally tapped lines, which adversely affects the signal fed into a subscriber’s home.

PCTA chairman Jose Lobregat said there is a one-on-one ratio between a paying cable subscriber and an illegal connection. “This translates to about P6.3 billion in losses annually for the industry,” he noted.

Emphasizing the need for legislation regarding this matter, the PCTA has initiated with Congress the passing of a bill that would criminalize cable theft while allowing the cable provider to recover losses from subscriber damage to equipment arising from cable theft. 

Lobregat said they hope the bill will be effected into law by the end of year or the start of 2011.

Apart from better service and reception, Lobregat noted that eliminating illegal connections gives customers the assurance that they benefit from fair use of service for what they pay for. 

“At the same time, this would allow the provider to recover quickly the cost of their investment which they can spend on improving the service such as going digital and adding more content and value-added services,” he said.

In its efforts to curb rampant signal theft, the PCTA believes that digitization is the initial step in addressing the illegal connection problem. “Digitization would allow the providers to carry more channels and more value-added services. It would also improve the service efficiency of the cable operator, as the current analog boxes in use today are almost obsolete and more difficult to maintain. On PCTA’s part, digitization of cable is not a question of whether to do it or not but when,” Lobregat explained.

Today, providers like Sky Cable have already invested in cable digitization that aims to offer superior picture quality while reversing the opportunity loss from illegal connections.

Sky Cable said it has earmarked around P1 billion this year for capital expenditure, around P200 million of which will be spent for the shift from analog to digital. The company is aiming to convert about 80 percent of its half-a- million subscribers to digital by yearend.