Regulators

DPOs say TRAI tariff order lacks value without 15% bouquet discount cap

The regulator will meet major MSOs and broadcasters on 4 January

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MUMBAI: With TRAI’s petition seeking clarity on the 15 per cent bouquet discount cap being dismissed as withdrawn in the Supreme Court, distribution platform operators (DPOs) are of the opinion that the entire value chain is now bound to function like it did before the new tariff order came into existence.

Last month, the regulator had filed a petition in the top court on the issue of 15 per cent cap on discount on a bouquet price of TV channels to consumers that had been set aside by Madras High Court while upholding TRAI’s right to regulate the broadcast sector.

Highlighting the delay, the Supreme Court was of the opinion that the TRAI should have sought clarification on the clause while arguments were being presented in the matter last year.

With the court’s latest act, CEO of the Chandigarh-headquartered MSO Fastway Peeush Mahajan believes that the DPOs will not be in a position to package their product, thereby being reduced to just passing on to consumers the offerings broadcasters have prepared.

“Basically what I’m seeing is, we are back to stage one. 15 per cent clause, as per me, is the gist of the entire tariff order. With 15 per cent gone, there will now be predatory pricing. Broadcasters will keep the rates higher for a-la-carte channels and give a discount of 50-60 per cent on the bouquets,” Mahajan told Indiantelevision.com.

Maharashtra Cable Operators’ Federation (MCoF) committee member Asif Syed concurs with Mahajan. According to him, the 15 per cent clause was in the interest of consumers as well as the MSOs.

“If the capping is not allowed now, the problem would be MSOs won't be able to bundle all the packages. If someone wants to watch a Marathi GEC, right now there is no option wherein you can get Star Pravah and Zee Marathi in the same package. MSOs could have done that had there been a 15 per cent cap. We won't market the pay channels. Since we are not getting a good share why should we help the broadcasters? Let them advertise, let them do the hard work. There would be resistance from our side,” Syed further added.

The DPOs point out that the problem with the pre tariff order period was that the a-la-carte pricing was very high and bouquet pricing was extremely low. In a sense, that’s the direction the industry will now be headed in.

“As on today, we basically have an LCO and subscriber contact programme where we are reaching to the LCOs and they are further reaching the subscribers. Now there is a big resistance from the cable operators, so let’s see how this will shape up. We are trying to convince the cable operators that we have to implement the order but the actual number of consumers registered by the LCOs is unknown,” Mahajan stated.

While the regulator failed to get a written assurance on whether the court would entertain similar pleas in the future, there’s little doubt of it seeking further amendments to the order going forward.

“To my understanding, TRAI has withdrawn the petition. In my belief, TRAI will definitely take steps to bring about whatever amendments are required in the tariff order so that it meets the objectives. In the meanwhile, it would be better if broadcasters review their negative approach and make it friendly to consumers as well as DPOs,” Kerala Communicators Cable Limited (KCCL) CEO Shaji Mathews highlighted.

A section of the DPOs believes that broadcasters have acted, by adopting an unrealistic pricing model, against the spirit of the TRAI order. This, they feel, has been done in order to pressurise TRAI as well as DPOs. The regulator’s objective was to ensure that rates are realistic. Broadcasters not adhering to realistic pricing models amounts to deliberately defeating the purpose of the tariff order, says an MSO CEO who did not wish to be quoted.

The TRAI is now set to meet major MSOs and broadcasters to discuss the implementation of the tariff order on 4 January. That is when there will be further clarity on what lies ahead for the entire content distribution value chain.

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