Chennai: In an attempt to remain competitive against other DTH and Cable Operators under the new Tariff Regime implemented by TRAI, Sun Direct has capped network charges with an offer to provide all its channels at a network charge of Rs 154 only, while other DTH and Cable firms offer only 100 channels for the same amount of Network Charges. as permitted by TRAI.
The monthly bill of a Cable or DTH Subscriber, under the new tariff scheme by TRAI, will have two component, they are Network charges and Content charges. While network charges are decided entirely by the cable or DTH operator, the Pay channel owner will collect the Content charges (Same not applicable for FTA Channels)
Apparently, Sun Direct has offered to forego the Network Charges that the operator can realize from the subscriber. With this, Sun Direct has waivedRs 1.25 per channel that it could charge for extra channels beyond the 100 channel basic pack. In case of HD channels, it could have been charging Rs 2.50 per extra channel beyond base pack. Instead, it has chosen to collect the Content chargesthat have to be paid by consumers to the Pay channel owners and pass it on to the Broadcasters.
Strategically, Sun Direct subscribers can simply activate all free-to-air channels without worrying about any impact on their monthly bill. Whether someone views only 100 free-to-air channels or 150 free-to-air channels, the total monthly bill will still be only Rs 153 only. In comparison, customers of other DTH platforms will have to pay around Rs 210 per month to watch the same 150 free-to-air channels.
Considering the scenario that many broadcasters are insisting on customers buying their mega packs that come with 20 or 40 channels. If someone buys such packs, he would end up paying Network Charges for 150 or 250 channels in all, which alone could come to Rs 200-350 per month, while in Sun Direct, it would be capped at Rs 153.
Advantage Sun TV Network and Sun Direct:
The move to cap Network charges would have helped both Sun Direct as well as Sun TV Network channels. Sun TV Network presently owns about 35 pay channels, and a DTH provider that gave all these pay channels free of charge would have been a big draw for South Indian audiences.It would help Sun Direct offer strong differentiation in the South Indian market compared to other DTH platforms.
Secondly, such a strategy would have maximized the reach of Sun Group’s pay channels as practically all of Sun Direct’s millions of customers would end up as subscribers of these pay channels.
Without such discounts, it remains to be seen what percentage of DTH users activate Sun Network’s channels, many of which have been priced at Rs 22.40 per month in terms of content charges alone.
The Master Stroke of Sun Direct is likely to have huge impact on the competition and might force them to rethink on their strategy.
