Broadcasters come together to condemn Trai amendment2 min read . Updated: 10 Jan 2020, 05:57 PM IST
- The IBF also criticized Trai’s imposition of network capacity fee (NCF), as a result of which only 25% of the consumer’s total bill comes to the broadcasters
- The new tariff order was expected to make channels cheaper for the consumer and offer more choice
NEW DELHI : Television broadcasters across the industry came together at an event in Mumbai under the Indian Broadcasting Federation (IBF) on Friday to condemn the recent amendments brought about by the Telecom Regulatory Authority of India (Trai) to the new tariff order (NTO) and interconnection regulations to the broadcast sector.
According to NTO 2019, consumers could choose the TV channels they want to watch and pay only for them at maximum retail prices (MRPs) set by broadcasters, instead of the pre-set bouquets offered earlier. The new tariff order was expected to make channels cheaper for the consumer and offer more choice. However, on ground, the opposite happened as the cost of like-to-like channel options went up.
To bring down the cost of entertainment for the end consumer, Trai announced amendments to the NTO. As part of the new amendments, Trai has reduced the cap on the MRP of individual channels, which can form part of any bouquet, to Rs.12 from Rs. 19 per month, which the IBF says has not been backed by any logical rationale or consumer insight. In a competitive and free market like broadcast, channel pricing should be determined through open market forces rather than through the arbitrary fixing of caps without any fundamental basis, the IBF president said in a statement.
The regulator has also sought to impose twin conditions for bouquet formation, effectively introducing a cap on bouquet pricing. The IBF feels that in order to offer wider choice to their consumers through affordable bouquets, broadcasters will have to either price their premier channels very low, hampering the ability to provide quality content or increase the price of other channels, artificially increasing the burden on consumers in the process. The twin conditions also limit the number of channels in the bouquet, which in-turn reduces the value delivered to consumers.
Moreover, when SD and HD channels are clubbed together in a bouquet, the same price reduction is applicable to both in spite of HD being a premium offering.
In regard to the regulator removing discounts on bouquets and not on a-la-carte channels, broadcasters say they expect a market facing and non-discriminatory approach to regulation.
“A few months back, at the request of the regulator, major broadcasters including Sony, Star, Zee, Viacom introduced promotional schemes and offered their premier channels at an MRP of Rs. 12 for a limited period. But the results showed no uptick in the a la carte offering in spite of the price reduction, clearly highlighting the consumer’s preference for bouquets," the IBF president said in a statement. “However, Trai appears to have a predisposition and bias towards a-la-carte and against bouquets and is attempting to compel DPOs (distribution platform operators) to not offer bouquets by removing their incentives to do so," he added.
The IBF also criticized Trai’s imposition of network capacity fee (NCF), as a result of which only 25% of the consumer’s total bill comes to the broadcasters.
“The NTO brought about far reaching changes to the way pricing of pay channels was managed. The collective cost to the broadcasters was well over Rs. 1,000 crore in just communicating the changes to the consumers. Even with that, there was an overall loss of 12-15 million subscribers in the process. All stakeholders, most of all our consumers, went through considerable inconvenience during the transition period. IBF believes these amendments will severely impair broadcasters’ ability to compete with other unregulated platforms and adversely affect the viability of the pay TV industry," the statement from IBF president NP Singh said.