Regulators

DPOs say broadcasters misusing TRAI tariff order with heavy discounts

Operators share their views on TRAI’s CP related to review the NTO

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MUMBAI: Distribution platform operators (DPOs) believe that broadcasters have misused the flexibility available to them to give a discount on the sum of a-la-carte as high as 90 per cent. The operators have shared their views on Telecom Regulatory Authority of India's (TRAI) consultation paper (CP) on ‘Tariff related issues for Broadcasters and Cable services. The industry has also given mixed views over the implementation of the 15 per cent cap on discount for a-la-carte by broadcasters.

TRAI had released the consultation paper seeking responses from stakeholders to review the new tariff regime on 16 August 2019. In its consultation paper, the authority informed that it has observed that broadcasters are offering bouquets at a discount of up to 70 per cent of the sum of a-la-carte rates of pay channels constituting those bouquets. “It indicates that in absence of any restriction on the discount on the offering of bouquets, broadcasters are making prices of a-la-carte channels illusory thereby impacting the a-la-carte choice of channels by consumers and giving huge discounts on bouquets to push even those channels which are not the choice of subscribers,” said TRAI.

Tata Sky in its responses to TRAI expressed disappointment of not revisiting the entire new regime. It said, “We are glad that TRAI has finally acknowledged these misgivings, however, to our  disappointment, TRAI, instead  of conducting a  holistic exercise of revisiting the new regime in entirety has chosen to selectively focus only on  few issues thereby limiting the scope of the exercise.”

“Having acknowledged the serious misgivings in the regulations, the current consultation is a piece-meal and isolated effort and not the appropriate way forward,” opined Tata Sky.

It also suggested that TRAI should allow the price forbearance models at the wholesale and the retail level. Further, the channel pricing framework and methodologies should be left to the parties involved, allowing the market forces and negotiation between the parties to decide the same.

Tata Sky also informed the authority that it is against implementation of any kind of cap overpricing. It suggested, “The DPO bouquet is much more subscriber-friendly as it caters to the needs of the subscriber for availing channels from multiple broadcasters within a pack rather than having to subscribe to multiple bouquets/ or channels.”

However Bharati Telemedia, in its responses, said, “We are of the view that at this stage, no changes should be made to any of the provisions of the tariff order including the provision w.r.t discount on sum of a-la-carte channels forming part of bouquets offered either by the broadcaster or the DPOs. Any changes at this stage will be equivalent to migration and this may not be the ideal time to cause any interference as it will also lead to unnecessary disturbances and customer dissatisfaction.”

DEN Networks said that some broadcasters are indulging in heavy discounting of bouquets by taking advantage of non-implementation of 15 per cent cap on discount which has created a non-level field vis-à-vis other broadcasters.

DEN Networks also expressed that popular channels are being unnecessarily clubbed with non-popular channels to push their uptake. It said, “The broadcasters who have large number of channels in their repertoire, are engaging in a practice of forming large number of heavily discounted bouquets (with minor changes) to push popular channels with non-driver channels. It can be seen that the channels which were FTA before the implementation of the new regulatory framework have been converted into pay channels with the price range of Rs 0.10-0.50/- just to push them with in a bouquet with popular channels of the broadcaster.”

The operator believes that the non-implementation of 15 per cent cap on discount clubbed with the ceiling of Rs 19/- on the price of MRP of a-la-carte channels forming part of such bouquets is responsible for pushing unwanted channels along with popular channels.

All India Digital Cable Federation (AIDCF) in its responses to TRAI said, “The non-implementation of the said proviso has given leverage to the broadcasters to offer their bouquets at discount which is as high as 70 per cent of the sum of a-la-carte channels forming part of such bouquets. This flexibility of giving discounts without a cap, created a non-level playing field for the distributors because the bouquets were priced on a discriminatory basis.”

Sharing similar views, AIDCF and GTPL Hathway said, “The flexibility available to broadcasters to give discount on sum of a-la-carte channels forming part of bouquets has been grossly misused by the broadcasters. The same has also been acknowledged by the authority. It is pertinent to mention that the broadcasters have not only offered huge discounts as high as 90 per cent on their bouquets but have also created confusion in the minds of consumers, by offering  numerous bouquet(s) comprising of few popular  and bulk of non-popular channel(s) with a clear intent to push their non-popular channels.”

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