New Delhi: TRAI’s new tariff order on the pricing of television channels is likely to bring down the prices of cable television and DTH services by 25-30 per cent. This scenario will also dent the profitability of DTH players owing to non-bundling of channels.
Telecom and broadcasting regulator Telecom Regulatory Authority of India had notified a new framework for pricing of television channels offered to subscribers in March. It had given broadcasters time till May to comply with the order.
The guidelines prevent a pay channel from being priced above Rs. 19 by broadcasters and distributors if sold as part of a bouquet. TRAI also added that channels priced at more than Rs. 19 will not be a part of a channel bouquet and will have to be offered to subscribers on an à la carte basis.
TRAI had recommended that consumers should be able to pay Rs. 130 for 100-odd standard definition channels. Cable operators charge anywhere between Rs. 200 and Rs. 300.
Several DTH players and MSOs used to bundle services, thereby giving consumers fewer options when it came to pricing.
The regulator has issued a draft order for content pricing and negotiations.
The TRAI order will offer a level-playing field for cable operators, MSOs and DTH. However, in the short term, profitability of DTH players may come down, as bundling offers no longer exist and the will surely benefit the consumers only.
Several players, including Star TV and Vijay TV, had challenged TRAI’s jurisdiction in fixing the price of content. TRAI, however, said its actions are in consonance with the TRAI Act, 1997. According to a report by ICICI Securities: “The distribution network model recommended by TRAI is clearly the ideal model and will pass on power to the hands of consumers.”