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New Trai formula to spark off DTH, cable pricing war
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New Delhi: A major tariff war is about to break out between cable operators and the direct-to-home (DTH) operators with the Telecom Regulatory Authority of India (Trai) considering a reduction of the existing pricing formula for broadcasters on DTH, which is likely to bring down DTH bills by half.

Trai met broadcasters, cable operators and DTH companies on Tuesday to discuss the new formula. The regulator is involved in the tariff revision as directed by the Supreme Court over a legal battle between cable operators, broadcasters and DTH firms. Trai has to recommend the revised tariffs to the court before June 30. Sources said that Trai is set to meet again on Wednesday to chalk out the revised tariffs.

According to experts, the new formula means cheaper content on DTH platforms compared to cable services, triggering a price war between cable and DTH operators. As per the current formula, DTH operators have to pay broadcasters at the rate of 50% of the tariff fixed for cable homes by Trai. Sources told FE that Trai is now looking at a revised formula, to be fixed at 30% of cable tariffs.

Therefore, the six DTH operators will have to pay broadcasters at 30% of cable tariffs fixed for non-CAS homes instead of the current 50%. Simply put, this means if a consumer today pays his cable operator Rs 50 for a cable channel, the same is available for Rs 25 per month on the DTH platform (half of Rs 50 as per the DTH tariff formula). Under the proposed Trai formula, this channel may only cost Rs 15 on DTH (30% of Rs 50).

Full Story: Indian DTH Blog

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