At a time when television channels are increasing rates steeply, Star India on Monday announced a 25 per cent reduction in subscription rates.

The Star bouquet will now be priced at Rs 30, down from Rs 40 earlier, and is effective from January 1, 2003.

Peter Mukerjea, chief executive officer, Star India said, "By reducing subscription rates, we believe the cable operators and ourselves can work together for the long-term benefit of households that view our channels everyday. It is our policy to continue to offer better value to all our customers. Whilst other broadcasters are increasing their prices, we believe a reduction is in keeping with our policy."

The move by Star is interesting since recently the Sony Entertainment's One Alliance Network hiked its rates by 37.5 per cent from Rs 40 to Rs 55, while the ESPN-Star Sports combine announced a 33 per cent hike in its monthly package from Rs 24 to Rs 32 per subscriber.

Zee Telefilms has also expressed its intention to hike subscription rates shortly, but is yet to make an announcement.

The move by Star India comes at a time when cable operators and television channels have been at loggerheads over the issue of subscription charges and under-declaration.

Though cable operators have decided to oppose any hike in subscription charges, no definitive action has been taken by them as yet.

An InCableNet spokesperson said, "We welcome the decision by Star to reduce subscription charges and feel this would go a long way in actually increasing the subscription base. A realistic and pragmatic approach to the situation is a welcome step."

Analysts view the issue of under-declaration by cable operators as a fall-out of the steep subscription rates and say the reduction in charges by Star India may actually put pressure on other channels to reconsider the hike in rates.

Star India has also adopted a different approach in boosting revenues -- it is tackling the problem of under-declaration rather than increasing subscription rates, which, according to industry experts, is counter-productive.