India’s telecom and broadcasting regulator is considering issuing a consultation paper aimed at reducing monthly cable and DTH bills of consumers, an official said, while admitting that the Telecom Regulatory Authority of India’s (Trai) new pricing regime which had aimed to make TV viewing more affordable hasn’t worked as planned.
“A consultation paper is in the works on reducing the broadcasting tariffs,” a Trai official said, asking not to be named. “We will have to see what kind of mechanism can be adopted to do so,” he added, without giving specific details on possible ways in which the tariffs could be cut.
Historically, while broadcasters like Star India have maintained that Trai does not have the jurisdiction to look into tariffs, the official said that the regulator always had the right but chose to maintain forbearance and let market forces decide the tariffs, a formula it also used for the telecom sector.
Trai’s latest move will come after it changed the tariff regime with the aim of making pricing of TV channels transparent.
Complaints of Costs Going up
This should also have reduced the cost of TV viewing for consumers. But the new regime has in fact led to several complaints that rates have actually gone up, with all round confusion on implementation as well.
The Trai official conceded that regulator’s move did not play out the way the authority had earlier expected. “The aim was to make TV channel pricing more transparent and to give control of channels to the consumers, while making it more affordable… but it did not pan out that way,” the official said.
Last December, Trai mandated that customers must pay for only those channels that they choose to see, leading to all channels getting priced individually. The rules came into effect from February 1, this year.
Now, channels cannot be priced more than Rs 19, if part of a bouquet of channels. There is no pricing cap on channels which are not part of any bouquet and are designated premium channels. Also, there is no cap on the amount of discount a broadcaster can offer on the sum of the MRPs of all the channels in the pack.
But while the move lowered tariffs for some consumers — for instance restaurants that show only one channel like a sports channel — for many others, monthly tariffs went up. A Crisil report has said that the new tariff regime would increase bill amounts of most cable TV and DTH subscribers, several examples of which also surfaced in the following months along with complaints.
“Our analysis of the impact of the regulations indicates a varied impact on monthly TV bills. Based on current pricing, the monthly TV bill can go up by 25% from Rs 230-240 to ~Rs 300 per month for viewers who opt for the top 10 channels, but will come down for those who opt up to top 5 channels,” said Sachin Gupta, senior director at the ratings firm.
Trai, at that time, had rubbished the report, and said that cost of TV viewing will fall over time.
Floating a consultation paper on reducing tariffs will be possible legally as well, since the Supreme Court has already said that Trai has the power and jurisdiction over framing tariffs and regulations for the broadcasting sector, the official pointed out. The court gave this observation while hearing Trai’s special leave petition on the 15% discount cap on TV channel bouquets with regards to the tariff order regulations.