Regulators

TRAI tariff order's impact on the industry

http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/smartcrop_800x800/public/images/tv-images/2017/03/06/trai%20%281%29.jpg?itok=1SOQUs5B

MUMBAI: How will Trai’s Telecommunication (Broadcasting and Cable) Services (Eight) (Addressable systems) Tariff Order, 2017, impact the industry and listed television eco-system companies?

Leading institutional broker Kotak Institutional Equities (KIE) believes that the implementation of would enhance the bargaining power of distributors versus broadcasters, at the margin. KIE contends that while it is difficult to factor in all permutations and combinations and quantify the impact, Dish TV would most likely benefit. The impact on Zee would be negligible, if any, given the strength of its bouquet. Sun could potentially gain, but its upside is contingent on digitization in TN.

KIE believes that flexibility to consumers will not reduce industry’s subscription revenue pool because there is a provision of access fee of up to Rs 130/month (excluding taxes). It says that even if a household subscribes for 10 popular pay channels on a-la-carte basis, it may result in subscription fee of more than Rs 100 (excluding taxes). It is unlikely that value subscribers (base pack/ low-ARPU subscribers) would be able to optimize subscription spends. If at all, they may receive less content for the same price going forward. However, there is room for premium subscribers (HD, multiple TVs) paying more than Rs 500/month per STB to optimize its subscription spends especially in case of nuclear families in urban markets..

“We expect distributors to price and package channels such that consumers continue to find bouquet appealing. We also believe industry will not encourage or promote a-la-carte buying: (1) LCOs would likely discourage a-la-carte buying, (2) difficulty/hassle in opting for a-la-carte (through SMSes or call centres) will act as a deterrent,” says a KIE report.

The regulation could possibly reduce scale led advantages of distributors. The permissible discounts would likely be on penetration milestones (percentage penetration as against absolute scale). Thus, the scale-led advantage of larger distributors can moderate. However, it will be difficult to track and monitor placement and marketing deals which may be used as an avenue to pass on scale-related benefits.

KIE believes that it is likely that strong players will become stronger and weak players will become weaker. There is a high possibility that low-ARPU subscribers may get less content for the same price whereas premium subscribers may be able to optimize their subscription spends because of uniform pricing across urban markets and rural markets notwithstanding difference in purchasing power.

Also, standalone channels and small broadcasters may be forced to pay higher carriage to maintain reach (at present DTH garners negligible carriage; post implementation DTH may demand higher carriage). Some channels may not be able to absorb the increase in costs. Small distributors, who do not have wherewithal for technological changes, may find it difficult.

On upselling and HD push, the KIE paper says, “Access fee under the new regulation would contribute meaningfully to distributors’ revenue stream. Additionally, DTH should also see a sharp increase in carriage revenues. Given this, it has to be seen if the distributor ecosystem remains as focused on upselling and pushing HD. We believe the incentive for them to upsell is lower under the new regulation.”

KIE is unsure if the regulations would weigh on long-term ARPU growth. Intuitively, more flexibility to choose content can make optimization of subscription budget easier at household level. It contends that barring top channels, price of most pay channels would be negligible and many channels would convert to FTA. Monetisation of niche channels may be difficult at the margin.

The broking house feels that implementation of regulation would force cable to push package tiering and raise cable tariffs in line with DTH provided that LCOs align with it and broadcasters do not make any payments to cable other than prescribed by the regulation. The time lag between technical implementation of digitization and monetization is 1-2 years. In fact even after 3-4 years, Cable tariffs and MSOs ARPU in phase I-II markets lag expectations.

Latest Reads

http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2018/07/20/Madras-HC02-Story.jpg?itok=JcUTUdWD
SC to hear Star India petition on TRAI tariff order late August

The Supreme Court today listed for 28 August the special leave petition filed by Star India and Vijay TV against a tariff and inter-connect orders of regulator TRAI that had been given a go-ahead by the Madras High Court.

Regulators Supreme Court
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2018/07/20/Rajyavardhan-Rathore.jpg?itok=yLtkCj9o
MIB Minister tries to allay fears on online surveillance & privacy violations

The Indian government has denied that its proposed Social Media Communications Hub, under the jurisdiction of Ministry of Information and Broadcasting (MIB), will violate a citizen’s privacy through monitoring of social media footprints as the plan was more directed towards propagating the...

Regulators I&B Ministry
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2018/07/20/SS_Ahluwalia-Ravi_Shankar_Prasad.jpg?itok=0VW-mg-k
Fake news on social media: Law & IT Minister favours evolving a policy

The Indian government seems to be speaking in two voices over the menace of fake news. While law and IT Minister Ravi Shankar Prasad today said he would hold talks with stakeholders to evolve a policy, his junior SS Ahluwalia on Wednesday had told Parliament that the government doesn't propose to...

Regulators I&B Ministry
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2018/07/13/MIB-2-Story.jpg?itok=CHFi2uxm
Supreme Court questions MIB’s digital chatter monitoring proposal

The government proposes, Supreme Court disposes. Well, almost. Not fully yet. Though, the apex court has questioned a Ministry of Information and Broadcasting proposal to monitor digital chatter and online footprint, observing today that if done it would be "like creating a surveillance state".

Regulators I&B Ministry
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2018/07/12/rathor.jpg?itok=LerAmHNZ
Comment: Why it’s important for Rathore at MIB to walk the (sports) talk

He may have started the #HumFitToh IndiaFit campaign that went viral on social media last month and had celebs and plebs posting images of their health routine.

Regulators I&B Ministry
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2018/07/12/ccm.jpg?itok=hpq93_54
CCI reduces penalty on broadcast companies for rigging bids

The Competition Commission of India (CCI) on Wednesday waived the penalty imposed on Globecast and reduced by 30 per cent the penalty imposed on Essel Shyam Communication Ltd (ESCl), rechristened Planetcast, for bid-rigging in tenders for procurement of end-to-end broadcasting services for various...

Regulators TRAI
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2018/07/09/TRAI-Story.jpg?itok=FL77A5H2
TRAI: Make STBs, content & telecom services disabled- friendly

With an aim to make communications and TV services more accessible to people with disabilities (PWDs), the Telecom Regulatory Authority of India has come out with a series of recommendations, including a confusing one suggesting that 50 per cent TV channels to be developed in PWD-friendly and...

Regulators TRAI
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2018/07/04/Untitled-1.jpg?itok=eLYU_9Gj
Tata Sky mulls fresh petition against TRAI tariff rollout

MUMBAI: Indian DTH operator Tata Sky is exploring options of filing a fresh petition in Delhi High Court against a Telecom Regulatory Authority of India directive to implement a new tariff regime from 3 July. Industry sources indicated that though Tata Sky withdrew its petition filed in the...

Regulators TRAI
http://www.indiantelevision.com/sites/drupal7.indiantelevision.co.in/files/styles/340x340/public/images/tv-images/2018/07/04/sb.jpg?itok=yJr8e0p2
VCPL to contest SEBI order on NDTV share acquisition

Following the Securities and Exchange Board of India (SEBI)’s directive to make an open offer for acquiring NDTV shares, Vishvapradhan Commercial Pvt Ltd (VCPL) has decided to appeal against the order with the Securities Appellate Tribunal.

Regulators TRAI

Latest News

Load More

Sign up for our Newsletter

subscribe for latest stories