- Local Cable TV operators facing losses already as Trai tariff regime is fully effective now
- Trai already sent out notices to six Cable TV operators for violating the rules
The new tariff mandate introduced by the Telecom Regulatory Authority of India (Trai) has not only changed the pricing to the subscribers, but it also has so many implications for service providers. Cable TV and DTH operators are expected to report an increased ARPU and revenue under the new mandate, however, subscribers are switching to OTT platforms in a large number which is denting their current operators. According to a new report published in the Times newspaper of Kolkata division, Cable TV operators have approached the sector regulator Trai on levying service charges to the subscribers as earnings said to be declined by around 45%. Also, the sub-par implementation of the new tariff regime is another reason why subscribers are staying away from choosing new channel packs.
Earnings for Operators Sliced in Half After New Tariff Regime
The new problems come at the hem of the latest Trai mandate which has caused the earnings for the cable operators to decline. Before the order, each cable operator used to get around Rs 175 to Rs 200 per cable connection, however, after the Trai tariff regime, these earnings have come down to only Rs 90. With this reduced income, cable operators are finding it hard to give out salaries to their employees who carry out the maintenance work like the collection of subscription fee or servicing of equipment. The cable operators’ association in Kolkata got together and decided to write to the Telecom Regulatory Authority of India (Trai) to ask whether they can levy a service charge or not. As per a member of the association, it would be difficult to serve the subscribers without collecting an additional service fee of Rs 20 to Rs 25.
The cable operators association also raised concerns saying that fixing cables and collecting subscription fee is round-the-clock work. They added that on an average, an operator employs at least five-six people, however, but with this reduced income, it would be impossible to serve the customers.
Paying Employees Becomes Hard for Cable Operators
What’s interesting to note is that although pay channel prices have gone up, the earnings of the operators have come down. As per the new system, 80% price of the pay channels goes to broadcasters, while the rest 20% is kept by Multi-system operators (MSOs) and cable operators. Out of the base fee which is charged for the first 100 FTA channels, operators get to keep Rs 75. For a package priced at Rs 200, operators earn around Rs 80, whereas for a package priced at Rs 300 they net above Rs 95. A package priced around Rs 400 nets the operators around Rs 110.
The operators’ association in Kolkata, emphasised that it will be hard for the companies to maintain the current employee count as the reduced earnings would mean less budget for handing out salaries. Minal Chatterjee of MSO Bengal Broadband also said that services might get delayed too. He also said that subscribers might have to visit the offices of the operators to pay their monthly subscription fee since, given the current situations, the workers collecting subscription fee will be laid off.
Now, we are yet to see how Trai intervenes in this matter and whether or not the regulator allows the operators to levy a service charge so that they can carry out easy subscription-fee collection and repairs for the subscribers.
Arpit spends his day closely following the telecom and tech industry. A music connoisseur and a night owl, he also takes a deep interest in the Indian technology start-up scene and spends rest of his time spilling poetry and stories on paper.