The Telecom Regulatory Authority of India (Trai) introduced the new tariff regime earlier this year and it went into effect to bring some reeling changes in the DTH and broadcasting industry. One of the effects of the new Trai tariff regime was that it increased the monthly bills of the cable TV and the DTH subscribers. However, now it seems that the Trai tariff regime might have had even far-reaching effects. What we mean by that is subscribers of DTH and cable TV services are giving up on their connections, and it is likely that the reason lies in the increased monthly bills which have been triggered by the new Trai tariff regime. The major slump came in the April-June quarter, where the DTH operators witnessed a 25% decline in their connections.
20 Million Subscribers and More Bail on DTH Connections
Trai publishes the performance indicator report every quarter, which brings to light the situation of the DTH, broadcasting and the telecom industry. In this report, it was noted that the industry as a whole had a 72.44 million strong user base in the January-March quarter, but come June, when the second quarter of the year ended, the total subscriber base of the DTH industry stood only at 54.26 million. It is also crucial to note that the implementation of the new Trai tariff regime happened on April 1, which explains why a lot of subscribers could have given up on their DTH or cable TV connections.
The loss in the subscribers for the DTH operators also had to do with the problems faced by the companies and the subscribers during the transition period of the new Trai tariff regime. It was during this period that DTH operators were plagued by lack of awareness on the consumers’ part, ill-trained staff and the ‘best-fit packages’ which seemed forced on the consumers since those were not the channels which the subscribers had opted reports The Hindu Businessline. On the other hand, at its very essence, the Trai tariff regime boasted that the subscribers would only have to pay for what they watch and nothing else. But, in the situation which followed right after the implementation of the new tariff regime, there were a lot of unintended consequences.
Subscribers Start Moving to Cheaper OTT Services
With the new tariff regime in place, the DTH and cable TV subscribers were left with little choice about what to do. As such, most of these subscribers either cut down heavily on the channels which they were subscribed to, or they started using the OTT services which provided video-on-demand content at a much cheaper cost or sometimes even for free. This meant that for entertainment, these subscribers no more relied on their cable TV or DTH connection.
The reports presented by the likes of CRISIL also highlight the same. The consumers of DTH services reported that after the new regulatory regime, their TV bills went up by 25% instead of coming down. This also led to the proliferation of the OTT services, which included names like Hotstar, SonyLIV, ZEE5, and even Netflix. The thing to note is that the paid version of these services charge the fraction of what the subscribers are required to pay for a DTH connection.
On the other hand, the DTH operators have been finding a way to retain subscribers on the TV screens and on their platforms by partnering up with OTT content providers. For example, Tata Sky has introduced its Binge service for Rs 249 a month which offers OTT content access with the satellite TV channels along with bundled subscriptions. However, whether or not these partnerships will have any bearing on the retention of subscribers on the platform is a question to be asked later.