How Trai's new order will put choice of channels in the hands of consumers

Urvi Malvania explains how the new tariff order by the Trai will put the choice of channel subscriptions in the hands of the consumers, when implemented

What is causing the delay in implementing Telecom Regulatory Authority of India’s (Trai’s) new tariff order by digital cable and DTH operators? 

The roll-out of Trai’s new tariff order by cable and DTH operators was delayed due to various litigations and consultations with the Trai on the one hand, the consumer inertia faced by distribution platform operators (DPO) on the other. Since this is a business to business initiative that requires consumer action, educating consumers and getting them to submit their choice is proving to be a time consuming process.  

What does the new tariff order entail?

The new tariff order sets out rules for making channels available to consumers at the broadcaster and the DPO level. Under the new order, all channels must be made available to consumers on an à la carte basis. While both broadcasters and DPOs can bundle different channels, if a consumer wants one channel less, or more, it has to be made available accordingly. Broadcasters are also required to declare which channels from their networks are pay and which are free-to-air (FTA), the genre these channels belong to, and the maximum retail price (MRP), exclusive of taxes, of all their pay channels. Under the new regime, the pay channel bouquets cannot have an FTA channel. This means a lot of the niche channels can no longer piggyback on more popular pay channels to enlist consumer subscription.

Additionally, a channel has to be priced the same across distribution platforms in the particular geography, meaning there cannot be differential pricing for cable and DTH platforms. For example, if ‘A’ channel is available in a geography for ‘X’ amount, it will cost the same whether the consumer has a cable connection or a DTH connection. The tariff order also put a cap of 15 per cent when it came to discounting on bouquet pricing. This means that the price of a bouquet cannot be less then 85 per cent of the sum of the price of individual channels. However, this condition was later revoked after broadcasters moved the Madras High Court against the discount cap, and the court rule in favour of the broadcasters.  

Why is there a need for this order?

The objective of implementing the new tariff order is to bring about transparency in the pricing of channels, reduce disparity in pricing on different distribution platforms, and to allow the consumer to select channels to subscribe, and pay only for those. It also aims to bring stability in pricing, as broadcasters and distributors cannot change the MRP of their channels/packs for six months after declaring the pricing. 

How will this impact the monthly cable/DTH bill of consumers?

Under the new tariff order, the distribution platforms are to provide a base pack of up to 100 FTA channels, including all the Doordarshan channels, at not more than Rs 130, exclusive of taxes. The fee will be considered capacity fee for the distribution of platform’s services. Apart from the public broadcaster’s channels, the base pack must have at least five FTA channels from the seven genres mentioned in the tariff order. In case there are less than five channels in a genre, the distributor may add FTA channels from other genres. 

In this light, the basic cable bill for the consumers is expected to reduce. The additional cost will depend on the choices made by the consumers. For every 25 pay channels selected by a consumer, the DPO can charge up to Rs 20, exclusive of taxes, as additional capacity fee, in addition to the MRP of the chosen channels. In case the consumer has chosen a pack of 26 channels, then he/she will be charged the pack price, plus additional capacity fee.

How does a consumer know what packs/bouquets are available? 

The Indian Broadcasting Foundation (IBF) and individual broadcasters have been running awareness campaigns for the new tariff order implementation since December. The broadcaster campaigns also include a gist of the most popular channel packs, information on how the consumers can select them. Distribution platforms have been engaging their consumer base through notifications on the electronic programming guide (EPG) on their service, door to door communication, advertisements on the their platforms, and where they are available, through their mobile apps. 

Trai has mandated that all the bouquets and à la carte channel pricing be declared on the websites of the DPOs and broadcasters and as such, the pricing and bouquets can be found there as well. Trai’s website also has a list of all the pay channels and their pricing. 

What happens if a consumer’s choice is not registered? 

DPOs have till January 31 to collect the choices from their consumers, and from February 1, they are to implement the new tariff order. If they have failed to do so, the broadcasters could be asked to disconnect signals to the defaulters, resulting in a blackout. This would mean discontinuation of services at the consumers’ end as well. It is thus important for all customers to select their choice of channels so that the new selection of channels can be implemented from February.

What if a consumer has pre-paid beyond February? What happens to the money already paid?

In case of an advance payment, the DPOs are to adjust the balance remaining with them against the fees for the newly selected channels/packs.