The Telecom Regulatory Authority of India (Trai) has issued a new tariff order that lets viewers pay only for the TV channels they want to watch at the maximum retail prices set by broadcasters. Mint analyses the impact of the order on consumers and broadcasters.

What’s the rationale for the order?

Trai believes that the motives for the switch from analogue to digital cable systems—transparency and real choice to consumers—haven’t been met. Chairman R.S. Sharma told Mint that the move would serve as a corrective mechanism: as viewers won’t opt for channels that charge more than others, such channels would have to lower their subscription fees. Broadcasters are worried this will lead to unpopular channels getting unsubscribed, while distributors fear a loss of revenue. Star India’s Vijay TV challenged the regulation in the Madras high court, but in October the Supreme Court upheld the high court order in favour of Trai.

What do subscribers have to keep in mind?

As part of the new regulations, direct-to-home (DTH) providers such as Airtel DTH, Tata Sky and Dish TV can charge subscribers a maximum of 130, excluding goods and services tax, for a set of 100 channels, including 24 mandatory ones from Prasar Bharati. In addition, customers can select free-to-air or pay channels. In case of the former, there will be no extra charge; if it’s the latter, only the price of the channels/bouquets will have to be paid separately. If subscribers opt for more than 100 channels, they will have to pay an additional capacity fee of 20 for every 25 channels.

Will there be a blackout of channels?

Trai said there would be no blackout till 31 January. After that, only the basic pack with free-to-air channels will be available. Customers must migrate to the new plan by the end of this month.

How will the order affect your cable bill?

It’s not clear yet whether your cable bill will rise. Bundling of channels had helped TV remain a low-cost proposition for years. Trai has withdrawn its appeal before the Supreme Court to reinstate the 15% cap on discounting of channel bouquets under the new order. So, broadcasters can continue to offer 30-55% discounts on bouquet pricing, compared to a-la-carte pricing of pay channels. Industry experts say unbundling may bring in the idea of “pay less for less, more for more" and encourage viewers to consider cord-cutting.

How have channels responded?

Most networks have brought out rates, some have even slashed prices. Star India will have channel bundles in seven languages—Hindi, Marathi, Bengali, Tamil, Kannada, Telugu and Malayalam—with Hindi packs starting at 49. The a-la-carte channels owned by Zee Entertainment Enterprises Ltd are all under the mandated 19 per month. Discovery Communications has also cut its prices massively, with DSport, for example, costing 4 per month on Tata Sky, compared with 75 earlier.

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