The Hindu Business Line : Review of MRP for pay channels in H2 2007: TRAI chief

The Chairman of TRAI, Mr Nripendra Misra, says MRP cap will be there for a limited period of one year and will be revaluated in the second half of the next year.

He further says channel prices can be different from the MRP cap of Rs 5.

Mr Mishra adds that prices are in line with market forces and everything has been left to the market prices except MRP on ceiling.

The pricing, he says, is based on Zee-STAR case of Rs 27 for 14 STAR channels. Mr Mishra says that TRAI wants prices to be affordable to the subscriber.

Excerpts from CNBC-Tv18's exclusive interview with Mr Misra:

Can you take us though the complaints that the broadcasters have, they are obviously asking for a different price? The main complaint comes for that Rs 5 standardised price. Would you look at a possibility of discussing this issue? Is this the final order or is TRAI open to suggestions?

Let me first clarify that this is the final order of TRAI because this has been announced after wide consultation.

We have a very transparent process by which we first put the entire subject, the issues on Web site for comments of the stakeholders and call them for a public hearing and then finally decide. As far as we are concerned, this is the final order on this subject. We have also clarified that this is the least interventionist policy that we have pursued.

If you see the features of this policy announcement, the first thing to be appreciated is that there is only a maximum retail price; it does not fix the individual channel price.

The second thing is that it does not fix the bouquet price. It also has not fixed the discounts for the bouquets. So everything has been left to the market forces except the maximum retail price ceiling, which has been determined by us.

It would be argued that yes certainly other things have not been fixed but is Rs 5 a realistic market price given the fact that the only thing constant is the cost of the transponder everything else varies? Cost of programming varies so vastly between channels, for instance a sports channel or a movie channel may have to pay far more than Rs 5 subscriber to source its programming?

You are right that each channel's price cannot be Rs 5. That is why it is only a maximum retail price.

A channel price can be anything between Rs 2-5. The trend today, if you see the DTH prices roughly, they are offering seventy-five channels for about Rs 180.

If you see the price of bouquet, which has been fixed by the TDSAT, they have fixed a bouquet price of eight channels for Rs 27.

Whatever prices, we have fixed is very much in line with today's markets forces.

Another very important clause is that any subscriber who opts for any channel has to remain with that particular channel for a minimum period of four months.

If he is opting for less than that then there is no MRP at all applicable to him.

So that takes care of the periodical interest, which is there for the sports channel that people cannot come in and go out within a month. They will have to remain with the channel for a minimum period of four months.

When you say limited period what do you mean?

We have said clearly in our notification, if one sees the explanatory memo that we are going to monitor the trend for one year.

Then see if the equilibrium is there, if it gets wider acceptability and competition is driving the rates properly then there will be no need for intervention.

Some broadcasters we spoke to seem to take a different view because they seem to think that this will delay the implementation of CAS because they see legislation and legal court hearing coming into play now. Do you see this or do you think this is just grandstanding by some of them?

Our endeavour would be to try and clarify to all major players why we have gone to this route and try and convince them that they must accept this so that CAS gets implemented as has been desired by the honourable court.

That I think will be a progressive step. Any hindrance in that in the long run for digitalisation of this entire entertainment sector possibly may not be in national interest also.

Your endeavour would be to convince them. Will you be open to even raising the MRP if they can convince you that in some cases they will have to raise the MRP?

I should be honest with you; this is going to be implemented from December 31 , I think there will be no rationale to try and revise the MRP even before this scheme has been implemented and put on ground.

Does that mean that you will be open to a revision once it has been implemented?

I have already clarified that we are going to monitor the trends, the market forces, how the prices stabiles and find themselves after the CAS has been implemented.

So if you are asking for a period when we are going to look at it, this period will come sometime in the second half of 2007, when we will re-evaluate the entire scheme.

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