What is new TRAI Tariff Order for DTH and Cable TV Operators?

The new tariff plan from Telecom Regulatory Authority of India has changed the DTH and cable industry forever. It also has major impact on broadcasters and TV channels. The major focus of the new scheme of TRAI has been to award complete choice in the hands of customers. However, it seems to have ignored the cost of such choice and the confusion and complexity attached with the choice.

What TRAI has done is to segregate package cost in two parts-

1. Network Content Fees (NCF) to be charged by DTH and Cable networks for broadcasting channels. This has been fixed as up to a maximum of Rs.130 for first 100 channels and then Rs. 20 for every 25 channels. Taxes extra. Please note that this is th maximum limit. A DTH/ cable operator can charge lesser than this also.
2. Broadcaster rate (BR) to be charged for pay channels which can not be more than the MRP declared by channel broadcasters. Amount charged by these broadcasters has to be same from all DTH operators and cable networks.

For example, if you want to have 100 channels and all of them are Free to Air (ie MRP of these channels are Rs. 0), then you will have to pay a maximum of Rs. 130+taxes only. You can pick and choose any 100 channels that you want. However, out of those 100, say, if 10 channels are paid channels with price of Rs. 5 per channel; then you will have to pay Rs. 130+ Rs. 50 (10*5) = Rs. 180 + taxes per month.

Few other points of TRAI Tariff Order are

• Bouquet of channles can not have a combination of free to air and paid channels. There has to be seperate bouquet for paid channels and free to air channels.
• Channels whose MRP are above Rs. 19 (say, sports channels) can not be provided in a bouquet and have to be available only on ala carte basis.
• A bouquet can not contain both SD and HD version of same channel.
• For the count of number of channels, 1 HD channel shall be counted as equal to 2 SD channels.
• The price of bouquet of channel can not be less than 85% of the aggregate cost of each individual channels. Note- This part of the order has been put on hold by a court order.

Implications of TRAI Tariff order

• Content will be the king. Bundling of less popular channels with popular one will end. Hence, less popular channel will have to fight and spent a lot on marketing in order to lure customers to subscribe to them. They are surely going to lose a good chunk of eyeballs.
• Small cable operators will be able to get the channels at the same cost as large operators. No DTH operator or MSO will be able to use its power to get discounts from broadcasters. However, it shall be a daunting task for small cable operators to set up infrastructure to support new changes.
• Customers won’t have to subscribe to the bundles. They will have more freedom to pick and choose channels. There will be more transparency.
• On the flip side, luring offers from DTH providers will end. Discounts on multi connection may also end. For customers, who wants to subscribe to all channels will also see their monthly cost going up.
• The price of bouquet of channel can not be less than 85% of the aggregate cost of each individual channels. Note- This part of the order has been put on hold by a court order.