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Consumer's cable bill set to shoot up with broadcasters complying with NTO 2.0

Broadcasters are unlikely to include their flagship channels in the bouquet and therefore the consumer will have to buy channels separately at a higher price, leading to an increase in the overall monthly bill

The television viewers may be staring at a steep hike in their monthly cable bills in the short term as broadcasters ready themselves to comply with the new tariff order of the Telecom Regulatory Authority of India (TRAI).

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The regulator has asked the broadcasters to send the compliance report within 10 days on the implementation of the amended new tariff order termed as NTO 2.0 as the latter failed to secure an interim stay on the Bombay High Court’s order from the Supreme Court.

The Supreme Court has reserved its order on the petition filed by the broadcasters for November 30.

The broadcasters will publish the revised Reference Interconnect Offer (RIO) according to the provisions under NTO 2.0 and submit the status report to the regulator within the deadline. Under the Interconnection Regulation, a time limit of 45 days has been prescribed for parties to enter into interconnect agreements. By that time, Supreme Court judgement will be pronounced which can go either way.

If the decision goes against NTO 2.0, the industry will witness a status quo. In case, the High Court order is upheld by the apex court, the industry will embrace another disruption impacting both broadcasters and consumers.

The disruption can either be equal to or greater than the impact of NTO 1.0, failing the whole purpose of TRAI’s objective to reduce the cable bill of a common man. TRAI itself accepted its failure to protect consumers’ interests and said that the monthly cable bill shot up after the implementation of NTO 1.0 while making a case for further regulation of pricing and bouquet formation of the channels under NTO 2.0.

On the other hand, broadcasters will have to bear the brunt for a few weeks until they make their way to their viewers.

The industry experts have claimed that the cable bill, contrary to TRAI’s objective, will further shoot up if broadcasters are forced to comply with NTO 2.0.

Explaining the logic, a broadcast industry expert said that the basic structure of the tariff has not changed. “The construct of tariff order is to encourage a-la-carte channels. The regulator bought DPO’s baseless argument of vested interest wherein they feel that broadcasters are growing their businesses using DPOs infrastructure. TRAI also bought DPO’s argument when it brought the policy to stop broadcasters from pushing their “unwanted” channels, a term used by the regulator for niche channels in the new tariff order, in bouquets which led to the closure of many niche channels after NTO 1.0. TRAI has no knowledge of copyright and the creative industry. They are also not interested in freedom of expression or consumers’ choice. It has been well established that the regulator is misguided by the misplaced vision of DPOs and it is doing everything to protect one stakeholder’s interest.”

The regulator thinks that capping the MRPs of the channels that wish to be a part of any bouquet at Rs 12 from Rs 19 will force broadcasters to reduce the MRPs of their flagship channels. Largely, the channels which have higher demand and affinity among viewers are priced at Rs 19.

“We have been waiting for the last two years for a streamlined distribution revenue and now reducing MRPs from Rs 19 to Rs 12 will hit us badly,” said a senior executive at a broadcast network.

“Broadcasters have realised that the regulator will not listen to them. In such a scenario, they will increase the prices of each of their channels while keeping the MRPs of their flagship channels intact at Rs 19. Now that most of the consumers want the flagship channels, they will have to pay for the high performing channels separately. On the other hand, the rise in individual channels’ MRPs will result in the rise of the prices of bouquets. This will certainly shoot up the overall cable bill of a common man,” said the broadcast industry expert quoted above.

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