It may seem yet another story of the rise of an empire through mergers and acquisitions. But behind the Rs 321 crore empire of Punjab’s cable czar Gurdeep Singh is also a curious saga of “political and police patronage” and advent of technology that made the game heavily loaded in favour of cartels at the expense of small cable operators such as Amritsar-based Jaswinder Singh Jassi, who committed suicide last week.
Gurdeep Singh, 51, now dominates the cable empire of Punjab with 67% share in Fastway Transmissions Private Limited, and that of its other two founders has gone down from 49% to 33%. Registered in November 2007 after the Shiromani Akali Dal-Bharatiya Janata Party regime came to power, Fastway’s turnover has grown by 200% from Rs 107 crore to Rs 321 crore in past five years (2009-10 to 2013-14).
He inherited the transport business started by his grandfather in the pre-Partition era as Khalsa Nirbhai Transport & Dashmesh Transport. Later, his father promoted Banda Bahadur Transport and Jujhar Transport companies, which operated passenger buses and trucks. Gurdeep, who joined the transport business in 1987, entered into contracts with all major car manufacturing companies in 1998 to kick-start car carrier transport business and went on to create a fleet of over 450 auto-carriers.
He then forayed into luxury buses under the flagship company — Jujhar Construction & Travels Private Limited, which now has 80 buses and has flourished along with those run by the Badal-owned Orbit Group.
But the bank balance to diversify into cable business, Gurdeep claims, came from selling agricultural land in Ludhiana to multinational Metro Cash & Carry for over Rs 40 crore.
Cable business roon
During the fag end of the Congress regime in Punjab, Gurdeep joined hands with Mumbai-based JS Kohli and Yogesh Shah, who had in 2003 parted ways with Wincable, a 100% owned subsidiary of Hathway. Cable operators in metros were regrouping as multi-system operators (MSOs) to challenge the monopoly of big networks like IN Cable of the Hindujas and Siti Cable of the Zee group and Hathway of the Rahejas. Kohli spearheaded this move in Mumbai. Digitisation had made the cable business a high-investment proposition and very lucrative.
Using 'political' clout to create monopoly
For the “tough guys” of the transport business, it was not difficult to consolidate the business through “allurement and intimidation”.
Fastway started striking partnerships with distributors in big cities such as Ludhiana, Amritsar and Jalandhar, with Gurdeep as a major shareholder in these joint ventures. The cartel flourished with its control over distribution of signals, since the MSO is the intermediary to broadcasters and local operators. An “obliging” political regime too made things easy.
“Fastway created a monopoly not only through its control over signals and big investment in digitisation, but also political and police patronage. They cut wires, beat up people and destroyed equipment of local operators who refused to fall in line. The police used to threaten us with false cases under the anti-piracy law or possessing CDs of X-rated films. They used to switch off set-top boxes (STBs) any time without giving notice to harass us. It was an option between becoming a part of the cartel and perishing,” said a cable operator of Ludhiana requesting anonymity, who later switched to Fastway.
While hundreds of local operators perished in the cartel war, a majority of those who remain are under Fastway and
its distributors reducing “dissenters” to an invisible minority.
According to Fastway’s own figures, 6,500 of nearly 8,000 local cable operators in Punjab are under it. The monopoly has also made it hard for direct to home (DTH) services to flourish in the affluent state.
Of the nearly 50 lakh TV households in Punjab, Fastway has a dominant share of over 24 lakh households while 15 lakh are under direct to home (DTH) network, 10 lakh are free-to-air and just 4 lakh are under other MSOs.
Beating rivals in price, ad war
Neither the big DTH companies nor the national-level MSOs have been able to break the Fastway’s stranglehold. It beats DTH in the price war by charging less than them on silver, gold, platinum or highdefinition packages. Its set-top box is not only cheaper — Rs 1,000 for urban areas and Rs 600 for rural areas — but its cost is also refundable.
It has own bouquet of 94 local channels, including a news channel that like Badalowned PTC News, is notorious for beaming only what favours the government. Other than monopoly over cable TV business, the big bucks also come from advertisements in local channels and generous share in those from the government.
However, Gurdeep contends it is digitisation that has made Fastway a success story. “It required huge investment. We gave quality content and services by laying underground fibre cables and providing set-top boxes made by American company Cisco.
The local operators could not invest in digitisation on their own and joined hands with us. It was not by force. According to TDSAT regulations, the billing is now done by the MSOs. The local operators resisted this as every penny was accounted for. Yet no local operator has left business because of us. It is a win-win for broadcasters, government, MSOs and local cable operators. Now, even DTH customers are coming back to us,” he claims.