Trai may link cable prices to inflation

Under increased pressure from the cable industry and broadcasters, the Telecom Regulatory Authority of India (Trai), also the broadcast regulator, has decided to roll back its plan to lift the freeze on the prices of cable bouquets. The ban is in force since 2003. Trai will, however, raise the price slightly to account for inflation during the last two years.

According to highly placed sources, Trai is planning to come out with a hybrid formula to ensure lower bills. For consumers, Trai is likely to fix a bundle of pay and free-to-air channels that the operators will have to offer at a price fixed by the regulator.

Since the past four years, the prices of the channel bouquets offered by the broadcasters to the multi-system operators (MSOs) have remained frozen. This despite the fact that the local cable operators are charging more from the households than four years ago.

Under the hybrid model, Trai will increase the prices of individual channel bouquets by 5-7 per cent keeping in mind the inflation, while continuing the overall freeze on the prices of channel bouquets.

Explaining the impact of this approach, an industry expert said, "The 14-channel bouquet from Star TV India, which has popular channels Star Plus, Star Movies, Star One, among others, is priced Rs 54 per subscriber. After the hybrid model, it will cost Rs 57-58 per subscriber."

The lifting of the price freeze has been a long-standing demand of the broadcasters as it will allow them the freedom to negotiate with the MSOs and cable operators, which in turn will rationalise cable pricing.

Trai had almost finalised its plan to lift the price freeze, which affects 68 million cable households where conditional access system (CAS) is not enforced, but had to renege under pressure from the broadcasters and the MSOs. CAS technology platform is in force in parts of Delhi, Mumbai and Kolkata, where consumers pay for the channels they watch.

According to experts, Trai is likely to propose a formula under which the cable operators will have to provide bouquets of minimum number of free-to-air and pay channels to the subscribers.

"Suppose a consumer is paying Rs 150 per month as cable fee. Now he will have the option of watching only the bundle of say 60 free and pay channel provided by the cable operator at a price decided by Trai," said an industry source.

Speaking to Business Standard, A Mohan, vice-president, legal and regulatory affairs at the Essel group said, "Prescribing ceiling at the retail level without any price control at the input level of the pay channel broadcaster is likely to result in chaos and confusion."