TRAI clears air around new tariff regime for broadcasters and cable operators

In light of complete digitisation and the new tariff regime for broadcasters and cable operators, the Telecom Regulatory Authority of India (TRAI) has prepared new regulatory framework to ensure the orderly growth of the sector.

The new regulatory framework has been prepared after a due consultative process, which lasted for more than one-and-a-half years. The framework touches upon the queries of LCOs which that the new regime will bring down their earnings. TRAI states that the new framework brings in a structure of assured revenue for MSOs and LCOs under the network capacity fee.

Furthermore, LCOs will also have the flexibility to negotiate their revenue share with the MSOs as per the structure provided under the Model Interconnection Agreement (MIA). The new framework does not alter the prevailing market structure under the MIA/SIA-based regime that exists since March 2016. The underlying Standard Interconnect Agreement (SIA) mitigates the risks of LCOs that can arise out of delayed failed negotiations.

“In the previous regime (before MIA/SIA-based structure) such delayed or failed negotiations could result in a blackout. However, availability of a fall-back mechanism under the SIA regime safeguards the interests of LCOs/ consumers from any eventuality of black-out or disconnection of signals,” the statement read.

The authority reiterates that the new framework is a comprehensive code that balances interests of service providers and consumers. The new regime once implemented is said to bring in an era of transparent tariffs and usher in better programming at most competitive prices.

As the date of migration of the subscribers under the new framework is approaching, the authority has observed malfeasance by some of the stakeholders as they are resorting to perpetrate fabricated and concocted facts. With the new framework, the authority is aiming to clear the misgivings and bring out the factual information for the benefit of the consumers and service providers.

As per the new framework, the consumer will get to choose the channels of their choice. The freedom of choice will mean a direct control of the consumer on his monthly bill for television services.

The new framework negates the notion that the consumers who watches 250 channels will end up paying much higher than at present. The authority states that as per BARC data, more than 90% of TV homes (family homes) view/flip 50 or a fewer number of channels. Therefore, any analysis that keeps 250 or more channels for pricing of monthly tariff results in creating a false impression. If, consumer chooses the channel which he/she really watches, then he/she will be paying a lesser amount compared to what he/she is paying as of now.

Out of 873 channels, more than 500 TV channels are provided by broadcasters on a free-to-air basis. The new framework provides the channels that are provided on a free-to-air (FTA) basis by broadcasters cannot be priced by the distributors. In the previous regime, various distributors (Multi-System Operators/ DTH Service Providers/ HITS or IPTV service providers) were pricing FTA channels.

The new framework brings clarity and transparency in pricing by separating the network capacity fee and pay channel price. Given the fact that nearly 90 % TV homes watch less than 50 channels, the authority with a view to provide full choice to the consumer has prescribed a basic tier of 100 channels with a network capacity fee of Rs 130 only.

“There will be no additional charge for providing any free-to-air channel. Any subscriber who opts for more than 100 channels (a rare choice of less than 10% consumers) can choose additional channels in each slab of 25 channels @Rs 20 per slab. The consumer can choose pay channels of her/his choice on a-la-carte basis or in the form of bouquets made by broadcasters as well as by the distributors,” TRAI said in the statement.

The new framework also stated that it provides complete transparency on the pay channel pricing structure whereby no distributor can charge above the MRP declared by a broadcaster. Subscribers may choose channels from the distributor either in the a-la-carte form or bouquet or a combination of both. The MRP declared by the broadcasters will be available on the Electronic Program Guide (EPG) of each distributor.

“The authority is overseeing the developments and tariff offers by various service providers. The authority will intervene in the sector in case of any malfeasance or malpractice and will act in the interest of consumers, keeping a balance of interest among the service providers. Some comparisons between the comprehensive bouquet prices of the previous regime with those of the a-la-carte prices offered under the new regime are being circulated on social media. Such comparison is skewed and is far from the real market discovered prices that are most likely to be in vogue, once the new framework kicks in.”

The authority also highlighted that there will be no total black-out of channels from December 29. “Nothing can be further from the truth as the consumer will get a full and real choice over the TV channels that are provided to her/him. All consumers are requested to contact their TV service provider through their registered mobile number or through the call centre to provide an explicit choice of the channels they wish to continue to watch.”

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