TRAI floats paper as it looks to overhaul its Tariff Order to end the misuse of freedom granted to broadcasters
New Delhi: Telecom Regulatory Authority of India (TRAI) today issued a consultation paper on Tariff related issues for Broadcasting and Cable services. The regulator said that it expected much more from the broadcasters and the DPOs to use flexibility given under the new regulatory framework. It said that in the absence of any restriction on the discount on the offering of bouquets, broadcasters are making prices of a-la-carte channels illusory thereby impacting the a-la-carte choice of channels by consumers.
The regulator in its consultation paper has said that while the Honorable Supreme Court gave no specific decision on the issue of capping on discount on sum of prices of a-la-carte channels forming part of the bouquets, the judgment of the Hon’ble Supreme Court, had touched upon the issue of capping of discounts on bouquets by broadcasters in detail.
The Hon’ble Court had considered the rationale behind the price cap and the need for it to prevent perverse pricing of bouquets vis a vis individual pay channel.
TRAI observed that too many bouquets are formed by the broadcasters/Distributors and many of them contain a very similar set of channels, with very few changes. With too many bouquets of broadcasters and DPOs, the consumers get confused and as a result, forced to adopt some suggested packs of TV channels which kills the freedom given to consumers to choose desired TV channels.
The authority has noted that heavy discounts are applied to bouquets making the a-la-carte prices of channels irrelevant in comparison. According to the information received by the regulator from the broadcasters some of the most selling bouquets carried heavy discounting as well. Star India’s SVP Hindi and SVP Telugu, Sony Pictures Network India’s Happy India 31 and Happy India 31 (A), Zee Entertainment’s Zee Family Pack Hindi SD and Zee Prime Pack Telugu SD, TV18s Colors Wala Hindi Value and Colors Wala Tamil Budget Plus and SUN TV Network’s Telugu Basic and Tamil Basic which were some of the most selling bouquets had discount above 30%.
This consultation paper primarily discusses issues related to discount given in the formation of the bouquet, the ceiling price of channels for inclusion in the bouquet, need for the formation of the bouquet by Broadcasters and DPOs, Variable NCF and discount on a long term plan.
The regulator only found 7 bouquets having bouquet price less than or equal to a channel price within the bouquet. NDTV, Mavis Satcom, Turner India, and Disney India’s bouquet were among the 7. Around 80 channels price have been reduced to Rs. 19 or below in the new regulatory framework. Data sourced from the broadcasters revealed a huge difference in the % of subscribers choosing a channel on a-la-carte basis vs % of subscribers choosing a channel as apart of a bouquet. Only select channels have more a-la-carte subscribers than bouquet subscribers.
Comparison of prices of channels declared by broadcasters in the old framework and new framework revealed massive increase and reduction of a-la-carte prices of channels. The authority noted that large broadcasters were pushing non-driver channels using the power of their popular channels into bouquets which were forcing smaller broadcasters either to exit from the market or convert their pay channel to FTA channel.
Certain stakeholders have suggested that channels priced Rs 19 shouldn’t be part of bouquets and be considered as a niche channel. The authority noted that 94 pay channels have been priced in lower than or equal to INR 1 so that they could be included in the bouquets.
A number of DPOs represented to TRAI that they want to offer long term subscriptions and as subscribers pay the amount of subscription in advance, they would like to offer a discount to subscribers. The regulator noted that heavy discount on the DRP for ARP may distort the market or some unfair practices may start in the market. Comments have been invited on the placement of channels on EPG to avoid hefty charging of placement fees disadvantaging the broadcasters.
On NCF for Multi TV DPOs were of the view that they can provide discount in DRP of channels and bouquets of channels, in case the broadcasters also offer discount in MRP of channels and bouquets of channels for 2nd TV onwards in a household subject to a robust system whereby DPO is able to authenticate the number of 2nd TV onwards in a home.
During discussions with the DPOs, TRAI was told that the new tariff order allowed broadcasters to provide promotional offers but the DPOs couldn’t do the same. Some DPOs have also raised the issue that the present tariff order does not permit DPOs to offer different NCF for the different regions. Given a large number of FTA channels offered by the DPOs without any additional NCF the regulator has invited comments as to whether the limit of 100 channels for Rs 130 should be increased. Taking note of the complaints from the subscribers TRAI in its paper has also asked whether DD channels should be over and above the hundred channels permitted in Rs 130.