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Trai upsets broadcasters with new tariff order
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#1
MUMBAI: Broadcasters and cable TV operators have been upset over the sector regulator's new tariff order for addressable systems while the loss-making direct-to-home (DTH) service providers have found something to cheer about at last.

Broadcasters are engaged in meetings and are preparing to move the court in a couple of days as they feel the Telecom Regulatory Authority of India's pricing system for addressable digital systems will shrink their pay-TV revenues. They are particularly distressed over Trai's fixation, for DTH, IPTV and addressable cable, of their individual channel rates at 35 per cent of the corresponding price for analogue cable.

"No other stakeholder has got any kind of relevant order except the DTH players. We are in discussions with other broadcasters to decide on what course of action we need to take," says Star Den CEO Gurjeev Singh.

Indian Broadcasting Foundation (IBF) is canvassing other broadcasters to move the court but no conclusive decision has been taken so far.

When contacted, IBF president and Dish TV MD Jawahar Goel said "We will talk in court now."

Already drained by hefty carriage fees from cable TV operators, broadcasters feel their subscription incomes could take a hit through an a la carte pricing order and a 35 per cent cost structure which would come into effect from 1 September. Earlier, regulation provided DTH operators to pay broadcasters at 50 per cent of their channel rates for analogue cable.

"What is this tariff order focusing on? It doesn't help any MSO or broadcaster. Nor does it help a customer. It is tilted heavily in favour of DTH operators," said the head of a broadcasting company.

Broadcasters said the new tariff order, if implemented, would force new contracts with DTH players. "We had signed long term contracts. Now those calculations will go for a toss. If DTH is facing intense competition at the retail level, so are we. There are 503 channels beaming into the country, out of which 147 are pay. It is already a highly litigant industry. We are not doing anything to change that," said a senior executive of a leading channel who did not want his name to be revealed.

DTH operators are not going overboard to welcome Trai's tariff order but see several positives emerging from it.

Said Bharti Airtel director and CEO - Airtel Digital TV Ajai Puri: "It is a small step in the right direction. This will marginally bridge the gap between DTH and cable. We had expected the tariff to be brought down to 20 per cent from the analogue price. HD content also should have been part of the review."

For DTH operators, the content cost is set to fall marginally. "We were already operating at the 35 per cent levels while the tariff order had then put a cap on 50 per cent. The fixed rate deals with the broadcasters were by and large in that corridor. For those channels that didn't fall under this system, the costs were at 50 per cent. They will have to come down now," said the head of a DTH operator who did not want his name to be revealed.

Added Videocon Group director Saurabh Dhoot: "We had asked Trai for a 15 per cent cap. We are a bit disappointed as we hoped Trai would go with a 20 per cent ceiling." Videocon operates its DTH service under the d2h brand.

Broadcasters, however, do not agree that the content cost would not fall overall. "DTH players will now start benchmarking deals with a sight on 35 per cent. And while Trai has fixed our channel pricing system, there is no cap on what the DTH operators can price a la carte channels to their subscribers," said a TV broadcast executive.

The cable TV sector is not particularly enthused. Said Digicable MD and CEO Jagjit Singh Kohli, "We were expecting a la carte pricing of channels for analogue cable. And there is nothing for digitisation in non-Cas areas. Though there is a 35 per cent cap on a la carte content for addressable cable networks, this is somewhat neutralised by a 9 per cent inflation allowed for broadcasters."

Hathway Cable & Datacom MD & CEO K Jayaraman, however, believes there are several positive takeaways and the stage is being set for digitisation in the country. "We now have a common tariff order for all addressable platforms. There is no price cap at the retail level for us. Besides, the regulator has provided for a la carte channels but given us a protection by stating that subscribers of a la carte channels will have to pay a minimum monthly subscription of Rs 150. That provides some support to our ARPUs when we talk of addressable systems."

Source: Indiantelevision.com

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DTH does not follow the policies laid down by TRAI interoperable boxes are still to be adopted by almost all dth providers.
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