Regulators

TRAI tariff order: MSOs welcome its direction

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Bibhu Rath President & CEO,Ortel Communications

NEW DELHI: At least two multisystem operators (MSOs) have welcomed the broad drift of the Telecom Regulatory Authority of India’s  (TRAI’s) Telecommunication (Broadcasting and Cable Services) (Eighth) (Addressable Systems) Tariff Order, 2016. The draft, released on Monday, seeks to bring in transparency to an otherwise disorganized sector.

Indiantelevision.com spoke to a bunch of executives from broadcasting, cable TV,  and even the TRAI advisor on the proposed regulation. Most said it was too early to comment as they had not got the time to study it.

S N Sharma, who surprised many earlier this year by returning to the national multi-system operator (MSO) DEN Networks as its  chief executive, said "It is a good draft; we welcome it. It brings a lot of transparency and ease, especially in the life of the consumer. We, as an MSO, look for a fair share of revenue, and hope to get the same." He said he still had to study the draft in full, and would give further comments later.

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S.N.Sharma CEO,DEN Networks Limited

Regional MSO Ortel Communications President & CEO  Bhibhu Prasad Rath, welcoming the draft, said “We believe that this draft regulation, if implemented, will bring in path-breaking changes to the industry structure with a lot of transparency and non-discrimination.”

Rath added: “Currently, there is widespread discrimination in the content deals done by some broadcasters with various DPOs (distribution platform operators). The prices of the same channels or bouquet of channels vary widely from one DPO to another across the country. The new proposed regulation intends to bring in uniformity in the cost structure so that a level-playing field will be created while we all compete in the same market.”

Rath also noted that the other major issue that the regulations attempts to address is the unbundling of channels. “Currently, many broadcasters offer around 80-90% discount / incentives on a bouquet deal as compared to the sum of a la carte prices of the respective channels. This, in my view, is unreasonable and intended to discourage a la carte subscription. The proposed regulation, by capping the bouquet discount at a maximum of 15%, will be a big relief to consumers who want to subscribe to channels on a la carte basis and will encourage DPOs to pass on to the benefit to consumers.”

“Overall, this regulation, in addition to bringing in non-discriminatory and transparent practices in the industry, will go a long way in implementing digitization in its true spirit where "choice" is in the hands of the consumers," he concluded.

“I think it is a fabulous piece of proposed regulation,” says HITS consultant Castle Media director Vynsley Fernandes. “I think the TRAI has really outdone itself. I can only see the industry opening up and growing from hereon.”

However, National Cable and Telecommunications head and founder of Home Cable Network of Delhi, Vikki Choudhry was the dissenting voice. Said he:  “This draft order is still not a cost-based tariff fixation, TRAI was supposed to conduct an exercise according to the Supreme Court and TDSAT orders. This draft tariff is completely anti-consumer. When the present tariff (rates) were coming down by 70 per cent, the regulator has further provisioned an increase of about 45-55 per cent for the Pay TV broadcasters."

(In May this year, TDSAT had said it thought TRAI “will be well advised to have a fresh look at the various tariff orders in a holistic manner and come out with a comprehensive tariff order in supersession of all the earlier tariff orders.”) Sunil Gupta, advisor to TRAI, responding to this allegation said: "We have protected the interests of the consumer: why should he pay even one extra rupee for a channel he does not want to watch? This draft brings the power of choice to the consumer’s hands. He can choose to have a lower cable TV bill or higher.”

Gupta further added that the new category of  premium channels will allow broadcasters to offer specialized channels at higher MRPs - even Rs 100 - if the consumer wants them at this price, thus overall increasing the ARPUs of all those in the value chain.

Gupta also said that the interconnection paper for local cable operators and multi-system operators would come out soon. The entire industry value chain should read this and understand we have protected everyone’s interests – the cable TV operators, MSOs, broadcasters, customers. The  ARPUs of the entire industry would go up in the coming months, he said.

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