Trai asks DTH players to cut rates by April 4

In a move that will lower the bill of the five-million direct-to-home (DTH) consumers by 5-8 per cent, the Telecom Regulatory Authority of India (Trai) has asked channels to reduce the bouquet rates on DTH platform by April 4.

The move will affect the subscription revenue of Star TV, Zee Group, Sony-One Alliance, Sun Network, ESPN-Star Sports, among others, who will have to significantly reduce prices for selling signals to DTH players.

However, this will help DTH operators lower the subscription fees. The average monthly fees per subscriber is about Rs 250 at present.

According to Trai's pricing formula for broadcasters, pay channels can charge DTH operators up to 50 per cent of the per subscriber rates they charge from the cable operators in the rest of the country (non-CAS homes).

This means that if Star TV's bouquet of 14 channels is priced at Rs 88 in non-CAS areas (70 million cable TV homes), it can charge only Rs 44 or less from existing DTH operators like Tata Sky, Dish TV and new entrants like Big TV, Bharti and Sun Direct. But all broadcasters are charging more from DTH companies than from non-CAS cable homes.

Explaining this industry analyst said: "As DTH platform is digital, there is 100 per cent collection of fees, while in the cable sector, the under-declaration (cable operators declare a lower susbcriber base than the actual) is 25-35 per cent. Therefore, even at a lower subscriber base, broadcasters earn more from DTH companies than from cable homes."

Senior executives of most pay channels said they would abide by Trai's order. "We are drafting the new rates, which will be submitted to Trai within the deadline," said a senior Zee group executive.

Star TV India executives said the law would be followed. However, executives of sports broadcaster ESPN-Star Sports said discussions were on within the company.

The leading sports broadcasters has a three-channel bouquet (ESPN, Star Sports and Star Cricket) and its per subscriber cable rates are about Rs 45. However, instead of charging Rs 22 or less, ESPN India is charging DTH players Rs 50 per subscriber for just two channels.

Leading regional broadcaster Sun Network is also charging more, sources say. Its bouquet rates for cable homes are said to be Rs 114 per subscriber while it is charging Rs 83 per subscriber from DTH operators.

According to an earlier TDSAT order (appellate tribunal for broadcasters and telecom operators), Sun Network has to provide DTH players its bouquet of 16 regional channels for Rs 25 per subscriber.

"The Trai directive will help bring in parity in rates," said a senior executive of Dish TV, the country's largest DTH company.