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Broadcasters to challenge TRAI tariff order on channels
Stung by TRAI's latest directive which mandates them to make available channels for addressable systems such as DTH and IPTV at 35 per cent of the corresponding rates for the analogue cable operator, television broadcasters plan to challenge the regulator's tariff order soon.

“There is no basis for arriving at the pricing. Legal heads of broadcasters will meet next week to look into this issue and we plan to challenge the TRAI tariff order,” said Mr Jawahar Goel, President, Indian Broadcasting Foundation, the apex body of broadcasters.

Industry sources said the TRAI tariff order will reduce broadcasters' income by 15 per cent. Currently, the channels are made available by the broadcasters to DTH operators at 50 per cent of the normal price charged to a cable operator.

The implementation of the TRAI's tariff order, which also mandates digital platforms such as DTH and IPTV to offer pay channels on a la carte basis, would boost the earnings of DTH operators. The order will come into effect from September 1 and DTH operators would offer pay channels on a la carte basis to consumers latest by January 1 next year. TRAI has stipulated that the monthly minimum subscription fee should not exceed Rs 150.

“The order would help DTH companies to boost their revenues and reduce losses. At the same time it would eat into broadcasters' revenue, who will oppose it,” said Mr A. Mohan, Executive Vice-President and Head of Corporate Affairs at Essel Group.

However, DTH players would have to incur an additional investment in their IT backend systems, especially in reconfiguring their subscriber management and billing systems to offer channels on an individual basis.

For DTH players, analysts said, reduction of 15 percentage points in content fee would help improve their margins as their content acquisition costs would decline further. Also, the cap of Rs 150 on minimum monthly fee should help operators retain their subscriber base. The current average revenue per subscriber ranges between Rs 40 and Rs 450 for different DTH players.

“The move to bring down the wholesale price of channels for addressable system is very welcome for the DTH industry. This is small but significant step in the right direction to enable India digitise faster,” an official at Airtel Digital TV said.

“However, as the level of under declaration is far higher in the analogue market, our request was to bring the DTH wholesale rates to 15-20 per cent of the wholesale rates applicable for analogue cable, to provide a level playing field and enable the DTH sector fasten the curve to scale and profitability,” the Airtel official added.

Source: The Hindu Business Line

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