Tata Sky payout to broadcasters up 40-50%

Tata Sky has expressed its disappointment that TRAI instead of conducting a holistic exercise of revisiting the New Regime in entirety, has chosen to selectively focus only on few issues thereby limiting the scope of the exercise.                               

In its submission to the TRAI‘s consultation paper ‘Tariff related for broadcasting and cable services’, Tata Sky said that the underlying theme for the New Regime is disassociated from the reality of Indian households. It said that there was no reason for continuing with such a regime where now for even fewer channels the subscriber is having to pay much more and called the comprehensive exercise of the Regulations in its entirety.

Pointing out its response in 2016 where it proposed Forbearance Model at the wholesale and retail level Tata Sky said that it stood by its earlier view and that there was no need for any cap. The service provider said that the pay-out by the DPO to the Pay broadcasters has increased by 40-50% thus leading to higher costs. The subscribers have borne the brunt of these higher costs and hence the larger number of grievances from the subscribers.

It said that TRAI insisting on the 15% cap would be contrary to the decision of the Hon’ble Madras High Court and has been interfered with by the Hon’ble Supreme Court. It proposed the abolition of any kind of caps and said that the DPOs should be permitted to mutually negotiate better terms for the current. Cap of 35% on MRP offered by broadcasters to DPOs, Cap of 35% discount on carriage fee by DPOs to Broadcasters and Cap of 15% discount on DRP of bouquets vis-à-vis the sum of DRP of the constituent a-la-carte channels should be discontinued as per the service provider.

On limitation of bouquets, Tata Sky said it was only opposed to a large number of bouquets offered by the broadcasters and that there should no restriction on the offering of bouquets by the DPOs. It also stood by the principle of forbearance. It opposed restricting the formation of bouquets and said that the ceiling of Rs 19 had artificially inflated the prices of channels.

Noting the Authority’s analysis in the consultation paper Tata Sky said that the flexibility of the framework has been misused to increase the channel prices, furthermore to deny the choice of channels to the customers. It believes that the restriction placed in the Regulations should be reviewed and removed in subscriber interest.

It was pointed out that the current consultation paper was heading towards micro-management which will not only not provide relief to any of the stakeholders instead make it worse. Tata Sky pinned the removal of its Multi NCF discount on the strait-jacked approach of the NTO which made it impossible to negotiate a mutually beneficial agreement with the broadcasters.

The operator to the limited extent agreed that this consultation process and the regulatory amendment thereafter should allow for a provision to DPOs to enable discounts on the NCF to their subscribers. It however strongly opposed capping of NCF for Multi-TV subscribers for subsequent TV connections. It is of the view that the broadcasters should also be allowed to offer discounts to Multi TV, Corporate, and Bulk connections for which the technical feasibility of operationalizing left to mutual negotiation.

Tata Sky described Long Term Subscription as any recharge of over 6 months. It backed discounting on LTR however without any cap with broadcasters also allowed to offer discounts. On LCN issue Tata Sky recommended doing away with the One Year Lock-In period. It pointed out that it was facing space crunch in the EPG for many genres where the number of channels has increased.

The company said DPOs should be allowed to offer promotional offers without any restriction on the frequency. Such schemes should have the flexibility to permit innovative segmentation. It also backed variable NCF based on district/state/city/area wise as well along with segmentation permit.

On NCF it said that there should be no cap standing by its model of forbearance. It said that any discount offered by the DPO shouldn’t be looked negatively and subsume the voluntary discounts into hard-coded regulations by increasing the channel carrying capacity. It opposed waving off the NCF charges on DD channels.

In its finishing comments, Tata Sky asked the authority to revert back to the earlier requirement of quarterly reporting. Tata Sky said that it was impossible to plan and share in the public domain, any of its marketing strategies, a good 15 days in advance. It suggested following the same principle as in the Telecom Sector.