Trai may set ceiling price for pay channels

The Telecom Regulatory Authority of India is contemplating a "ceiling price model" for individual pay channels of various broadcasters like Star, Sony and Zee.

This follows the Telecom Dispute Settlement Appellate Tribunal ruling last month, halving Star's pay TV package rates to Rs 27, exclusive of taxes for direct to home TV, against Rs 54 charged by the broadcaster for cable TV.

While the exact details are likely to be finalised by the month-end, sources said the "ceiling price model" would permit a broadcaster to offer any rate below this maximum price and even offer discounts on bulk subscription of channels.

A Trai official said: "Broadcasters can price their channels below the maximum level, responding to forces of competition and will be free to offer discounts and price schemes."

There are two opinions on the subject of DTH pricing in the authority "" one is that since there is competition in this segment (three operators "" Zee's Dish TV, DD Direct Plus and Tata-Sky) there is no need to intervene in this segment. The other opinion is that regulatory intervention should be used as a means to propel growth.

Asked if Trai was studying other regulatory practices in pay channel pricing globally, the official said: "Pakistan is one such country, which has fixed pay TV channel rates at Re 1 per channel. There, things can be ordered by a general. Here it may not be possible to do so."

On July 14, TDSAT had ordered Star to provide its bouquet of channels to Essel Group-promoted Dish TV at half the cable rates, as the direct-to-home platform is a fully addressable system. However, TDSAT had refrained from laying down "a la-carte" pricing for the channels, as it deemed the same to be the prerogative of Trai.

Broadcasters, multi system operators (MSOs) and cable operators have been at logger heads for long on the issue of fixing individual prices of channels. This conflict has held back the implementation of the conditional access system for a long time.

MSOs and cable operators have alleged that broadcasters lump the less popular channels along with the more popular ones in their bouquet and individual pricing of channels would allow the consumers more choice.

With Trai at the helm, the issue may finally get resolved even as the three metros of Delhi, Mumbai and Kolkata adopt CAS by December 31 this year.