DTH Operators Could See Profitability Going Down After New Trai Tariff Regulations: Ind-Ra

The Telecom Regulatory Authority of India (Trai) is planning to bring some major changes to the broadcasting tariff regime which stirred the entire DTH and Cable TV sector earlier this year. Trai, last week, released a consultation paper, in which it sought the views from shareholders on various aspects which will make the tariff regime more transparent. Market research firm, India Ratings and Research (Ind-Ra), says that the new changes to be implemented by Trai will take at least six-eight months to become fully effective due to the challenges involved. In the consultation paper, Trai discussed various aspects including variable NCF charges, discounts on long-term channels packs, count of bouquet packs from broadcasters and so on.

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Trai’s New Tariff Regulations Will See Profitability of DTH Operators Going Down

Ind-Ra says that there will be multiple challenges faced by multiple system operators (MSOs), local cable operators (LCOs) and DTH operators while implementing the changes to tariff regime. Even though there are challenges involves, Ind-Ra believes that the tariff order is likely to de-risk the business model of MSOs and LCOs as their revenue stream will contain fixed network capacity charge (NCC) from subscribers and content commission from broadcasters (BC), thereby effectively passing through content cost. DTH operators, on the other hand, will likely see their “profitability being impacted in the next six to twelve months since they have already sold long-term plans till the end of 2018 and DTH companies won’t be allowed to withdraw or reprice a plan that’s already in use plan.”