TRAI’s new framework for pricing of television channels is set to bring down the prices of cable television and DTH services by 25-30 per cent. The profitability of DTH players may also contract owing to non-bundling of channels.
Telecom and broadcasting regulator Telecom Regulatory Authority of India had notified its Telecommunication services tariff order — a new framework for pricing of television channels offered to subscribers — in March. It had given broadcasters time till May to comply with the order.
According to the new tariff order, agreements between broadcasters and distribution platforms have to be signed by June 1.
TRAI had recommended that consumers should be able to pay ₹130 for 100-odd standard definition channels. Cable operators charge anywhere between ₹200 and ₹300.
The regulator has issued a draft order for content pricing and negotiations.
“The TRAI order ... is beneficial to players like us as it will offer a level-playing field for cable operators, MSOs and DTH,” said Aniruddhasinhji Jadeja, MD, GTPL Hathway. “However, in the short term, profitability of DTH players may come down as bundling offers no longer exist. The consumers will benefit.” GTPL has 5.41 million subscribers in 11 States.
Several players, including Star TV and Vijay TV, had challenged TRAI’s jurisdiction in fixing the price of content. TRAI, however, said its actions are in consonance with the TRAI Act, 1997.
Bouquet ceilingThe guidelines prevent a pay channel from being priced above ₹19 by broadcasters and distributors if sold as part of a bouquet.
TRAI also added that channels priced at more than ₹19 will not be a part of a channel bouquet and will have to be offered to subscribers on an à la carte basis.
Several DTH players and MSOs used to bundle services, thereby giving consumers fewer options when it came to pricing.
According to a report by ICICI Securities: “The distribution network model recommended by TRAI is clearly the ideal model and will pass on power to the hands of consumers.”