TRAI’s new tariff order will stifle content creation, raise bills for users: Broadcasters

Varun Aggarwal Mumbai | Updated on January 10, 2020

Say limiting discounts on bundles and fixing prices of popular channels will force broadcasters to increase prices of smaller channels

Television broadcasters on Friday said the Telecom Regulatory Authority of India’s (TRAI) new tariff order (NTO) will not only increase bills for customers but also stifle the industry.

The heads of TV broadcasting companies came together on a common platform to express concerns about the NTO.

“Even as the new regime was settling down, on January 1, 2020, TRAI notified certain amendments to the New Tariff Order and Interconnection Regulations for the broadcast sector. These amendments attempt to make further disruptive changes in an industry already grappling with the paradigm shift to an MRP-based pricing regime,” Indian Broadcasting Foundation President NP Singh said. There have been 36 changes in regulation announced by TRAI in the last 15 years, making it extremely difficult for broadcasters in India to do business and contrary to the government’s stated position of ensuring ease of doing business, he added.

New tariff order

TRAI’s new tariff order mandates an MRP of ₹12 per channel, down from the earlier ₹19. It also restricts discounting on channel bouquets to promote a la carte offerings. But, broadcasters say it will not help in lowering cable bills as is widely perceived; instead, it willlead to an increase in monthly bills.

Since October, most broadcasters have already been offering their popular channels for ₹12 instead of the MRP of ₹19 that was earlier enforced. Yet, the broadcasters claim, there was hardly any uptake for a la carte channels as consumers prefer to take channel bouquets. Thus, the exercise ended up costing them money while consumers saw no benefit.

“If a thoughtful collaborative exercise was done last year, where is the need to bring in NTO 2.0?” asked Uday Shankar, President, The Walt Disney Company APAC, and Chairman, Star & Disney India. This shows the exercise was not well thought through, he said, adding: “If TRAI is so concerned about cutting down on bills, how are they allowing an NCF (network capacity fee) of ₹160?”

An NCF of ₹160 works out to nearly 60 per cent of the cable TV bill for an average consumer, adding to the cost burden rather than easing it, broadcasters felt.

Channel bundle

Apart from reducing the price per channel to ₹12, the NTO places a cap on channel bundle discount to 33 per cent, making channel packs less lucrative than before and allowing customers to truly select only the channels they want to watch.

“Smaller channels are already facing enough competition from OTT players and they’ll get completely wiped out without the flexibility of offering discounts on such channels,” Shankar said.

Lashing out at TRAI, Aroon Purie, Editor-in-Chief, India Today Group, said: “The regulator’s job is to facilitate and enable a fair playing ground for everyone. Instead, the regulator is strangulating the industry and killing the golden goose laying the eggs. It’s like tying both your hands and legs and asking you to go and swim.”

Broadcasters said limiting the discounts on bundles and fixing the prices of popular channels will force broadcasters to increase the prices of smaller channels. The consumer will end up paying more each month, they added.

Published on January 10, 2020

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