The Telecommunication and Communication Ministry will soon shut down 695 illegal pay television (TV) operators across the country that are currently serving an estimated 1.4 million subscribers, an official says.

As reported by Antara Sunday, the ministry's spokesman Gatot S. Dewa Broto said the emergence of these illegal operators had not only caused potential losses to legal operators but had also led in practice to unequal treatment by the government of the companies concerned.

"The ministry for sure remains committed to the existing regulations on pay television service, in which it requires to have licenses from us," said Gatot as quoted by Antara as saying.

According to Gatot, at present pay television operators include MNC Sky Vision (Indovision), Aora Nusantara (Aora TV), Nusantara Sky Vision (Top TV), Telkom Vision (Yes TV), Indosat Mega Media (IM2), and First Media.

"Due to these illegal operations, the government would also lose potential non-tax state revenues, including from broadcasting fees," he said.

He also said Indonesia would potentially receive complaints from other countries for adopting a passive position towards these illegal operators rather than cracking down on them.

These illegal operators had violated the copyright of the producers of the programs they broadcast, not paying fees either to producers in respect of copyright or towards onward distribution costs.

According to the ministry, these illegal practices included redistribution of services provided by existing legal operators without prior permission or licenses, and making deals with foreign-based pay television operators, which had no broadcasting rights in Indonesia.

These international operators could not operate legally in Indonesia, but nontheless were operating services with local companies to supply broadcasting services in some provinces.

However the resulting services in Indonesia were illegal and not authorized. This had tended to develop in areas where there were niche-markets based on clusters of higher revenue potential customers.

For example, in the energy and mining center of Balikpapan in East Kalimantan, there were at least five illegal operators serving around 70,000 subscribers charging average monthly fees of between Rp 22,000 (US$2.2) and Rp 60,000 for a full broadcast service package, according to the ministry.

By contrast legal operators charge subscribers between Rp 70,000 and Rp 145,000 a month for basic packages, because they are paying for their programs and licence fees.

Similarly the high-income Riau Islands province houses the largest numbers of illegal operators. In Riau there are four operators with more than 1,000 subscribers each charging monthly fees of between Rp 30,000 and Rp 150,000.

Despite these problems with illegal operators, legal pay TV operators forecast a 65 to 70 percent subscriber increase this year, regardless of global economic problems.

The optimism comes from the fact that only about 7 percent of the potential market has been penetrated, according to pay TV subscriber operator Indovision.

The potential market for the industry is around 10 million users, while only 700,000 of them have legally subscribed to the service. Indovision thus far has the largest market share of around 68 percent.

Pay TV industry highlights

Year-------Legal subscribers

2007-------450,000

2008-------700,000

2009*------1,115,000

* projection

Source: Telecommunication and Communication Ministry

Pay TV industry highlights

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