Tariff amendments will benefit both consumers and broadcasters, believes TRAI

New Delhi | Updated on January 06, 2020

TRAI has introduced certain caps on discounting on channel bouquets

Telecom and broadcast regulator Telecom Regulatory Authority of India (TRAI) believes that the recent amendments to the tariff and interconnection regulations will give consumers the freedom to subscribe to only the channels of their choice and help bring down cable and DTH bills.

The regulator also believes this will in-turn spur demand for more channels meaning more revenue for broadcasters.

SK Gupta, Secretary, TRAI told BusinessLine, “The key issue was that we had given broadcasters a lot of flexibility in pricing their channels and putting them in the bouquet in the manner that they want. Unfortunately, the results were not in alignment with the flexibility and responsibility given to broadcasters. Therefore, we had to fine-tune the tariff order to protect consumers’ interest.”

Observing that the a la carte pricing was illusory, TRAI has stated in the past that huge discounts on bouquets coupled with high a la carte prices of popular channels were leaving customers no choice but to continue to opt for bouquets making the a la carte choice of popular channels less attractive.

Now, TRAI has introduced certain caps on discounting on channel bouquets compared to the sum of the a la carte pricing of the constituent channels and has reduced the MRP ceiling to ₹12 for a channel to be part of a bouquet compared with ₹19 earlier.

Replying to a query on broadcasters expressing concern about changes in the tariff regime, Gupta said that they need to understand the implications of the changes in the tariff regime, “in a holistic manner and not take a limited view.”

“If consumers get a channel that they want to watch at a price of their expectations, the probability of such a channel being adopted by consumers is high. Therefore, it will not only increase subscription revenues but also eyeballs which in turn will give broadcasters more money in terms of advertising revenues,” he said.

In a bid to address broadcasters’ concerns on high carriage fees, TRAI has taken steps including capping monthly carriage fee to ₹4 lakh payable by a broadcaster to a Distribution Platform Operator.

Gupta said, “They were paying very heavy carriage fees which has now almost been reduced by one-third or even more in some cases. So this will be beneficial for broadcasters.”

Talking on the issue of network capacity fee, Gupta said that consumers will now be able to get more channels for a network capacity fee of ₹130 per month (excluding taxes) as they will get 225 channels (including DD channels). The regulator has also capped NCF to ₹160 excluding taxes per month for more than 200 channels.

Published on January 06, 2020

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