Cable TV

MSOs share different outlooks on impact of NTO 2.0

The amendments have come into effect from 1 March.

MUMBAI: All the stakeholders of the broadcasting sector had a tough time coping with the new tariff order (NTO), which was implemented last year. While TRAI brought amendments to the new price regime, touted as NTO 2.0, on 1 January, it has again sent tremors across the industry. The changes have irked broadcasters but multi system operators (MSOs) have different opinions on NTO 2.0’s impact.

The NTO had a drastic impact on the players in the cable industry resulting in a dip in subscriber base. However, Siti Networks nodal officer for broadband and video verticals Vishwa Bandhu Sharma feels that the new provisions will not disrupt MSOs again.

He told, “There was a lot of subscriber loss when NTO 1 came in effect. Multi-TV homes stopped using their second and third TV sets. But with NTO 2.0, we are expecting them to activate those TV sets again.”

Speaking about the impact that the reduction of prices will have on the industry, Sharma shared that the ARPU would remain more or less the same because of the discount on the NCF. He said that he is expecting people to move to more a-la-carte selections for channels that have good content but are not a part of the new bouquets.

While Sharma believes that MSOs will benefit from NTO 2.0, one of the major MSOs, not willing to be named, opined that the changes will affect the top and bottom lines of both MSOs and local cable operators (LCOs).

“Discount of 60 per cent on additional TV will result in revenue loss for both MSO and LCO. The loss will be 12-15 per cent and will reflect in the top line and bottom line. Even if 10 per cent STBs (second TV) are recovered, the loss will be 8-10 per cent,” the executive from the other MSO stated.

TRAI also said in the amended regulation that broadcasters shall not be permitted to give any discount for adoption of bouquets to DPOs in the 15 per cent category as permitted in Interconnection Regulations 2017. According to the executive, this will result in the reduction in bottom line of the MSOs. Additionally, it will increase disputes between the broadcasters and MSOs.

While DD channels have been excluded from NCF, the executive said: “We have invested in infrastructure for building channel capacity and delivering it to subscribers. We cannot charge placement from the government but our right to charge NCF subscriber should not be withdrawn.”

Siti Network’s Sharma also added, “When broadcasters were given a chance to rework their prices, they took it to the maximum level and also charged a premium rate. They also included their low base channels in the bouquets, even with bouquet price at 50-60 per cent off. Of course, it (NTO 2.0) will be a disadvantage because now to include those channels in the bouquet, they will have to reduce the price or they will have to leave the channel out for a-la-carte selection. People will not be subscribing to lesser popular channels, and that’s why they are not happy.”

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