One of the biggest cable feed providers of India, Hathway Cable and Datacom informed that consumers are going to benefit after the latest direction by Trai which overrides the previous plans being provided by the DTH providers. As per an Ultra News report, starting December 29, the Trai will avail new schemes for the consumers which will be based on a different pricing model. This is meant to bring a change in the DTH plans and is bound to be beneficial for the consumers. The company, however, also noted that it wouldn’t be so good for the broadcasting groups who have been using ‘bundling’ to force unwanted and extra channels along with the popular ones in a single package.
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Star India, Tata Sky and Airtel Digital Opposed New Mandate
It was in last year, when the sector regulator, Telecom Regulatory Authority of India (Trai) came up with the new guidelines to regulate the pricing of the channels and the subscriptions. However, the guidelines were contested by Tata Sky, Airtel Digital and Star India in high courts across the country, but, now the Trai has trumped these legal challenges, and the guidelines will come into effect starting December 29th.
Hathway MD Rajan Gupta remarked that among everyone in the chain, the subscribers will be benefitting the most from the new pricing as now they won’t have to pay for the channels which they do not want to watch. The MD said, “Due to the shift from wholesale to retail, the consumer doesn’t have to pay for the whole bundle,” he further added, “consumers are more empowered as they have choice and power over what channels they wish to watch.” Gupta also said, “We believe this shift from wholesale to retail pricing, the single biggest change, will shift power from broadcasters to consumers.”
As part of the new pricing system, the consumers will be able to choose which channels they want to watch, and they won’t be forced to pay for the channels which are bundled unnecessarily by the DTH providers. Further on, the DTH provider will have to ship a base pack to the subscribers which will not be priced more than Rs 130 plus tax. The significant difference now will be that the users will have the power to add or subtract any channel to their base pack. What’s noteworthy is that the base plan’s upper price cap is Rs 130, so the base pack can even be priced at Rs 0. Apart from the base pack, the DTH providers will also have to provide top-up packs to the subscribers which will consist of 25 SD channels, which will be entirely chosen by the customers.
The new rule by Trai also outlines that an HD channel will be considered equal to two SD channels. So as part of the base pack, subscribers will be able to include either 50HD channels or 100 SD channels or also the combination of both. Another thing to note that is if a subscriber buys a pay channel as a part of their subscription then they will have to pay the price of the channel over the base pack charge. Like it is the case with the base pack price, the DTH operators will be able to price the pay channels at any cost, including Rs 0. However, the upper cap of the pay channel will be the MRP declared by the channel owner.
No Discriminatory Pricing of Channels for DTH Providers
Another facet of this new pricing is between the DTH providers and the channel owners. Trai has now mandated that the channel owners will be required to declare a single price for their channels plus one price for the package of channels. These prices will be applicable for all DTH and cable providers meaning that all of them will be getting the channels at the same rates and no one DTH provider will be getting a discount.
This implementation has been done by Trai to remove the discriminatory pricing between DTH operators and channel owners. Previously, DTH providers like Hathway had complained that a handful of other DTH services were getting the channels for a fraction of price which they were paying. Also, channel owners often cut off their feeds to certain cable and DTH operators to force them to pay higher charges.
On this issue, Gupta said, “The new tariffs will help in making the entire framework and value chain of the broadcast sector completely transparent, provide choice to the consumer and ensure a fair deal among LCOs, MSOs and broadcasters…Hathway has been one of the victims of content-cost disparity and therefore, should be a significant gainer from the tariff order implementation.” He further added, “We believe the tariff order is a beneficial proposition for broadcasters who have good content that consumers want to watch, and probably not so good for broadcasters who have been more used to bundling many channels with no demand, with one driver channel.”
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