Trai Broadcasting Mandate: 3 Unexpected Drawbacks of the New Pricing Implementation

The new Trai tariff regime has made the TV industry more transparent and flexible. However, the industry and the subscribers have to pay the price for it

Highlights
  • The earnings for cable TV operators are hit by 45%
  • The subscribers are also complaining about increased monthly rentals

The Telecom Regulatory Authority of India (Trai) introduced the new tariff regime with a whole new pricing structure to make the industry more transparent, and in some ways, the regulator has achieved this feat as now subscribers of cable TV and DTH services know the prices and the services for which they are paying for. There has also been increased flexibility in the industry, but there is also the flip side of this coin. The new Trai tariff regime has also brought some unexpected drawbacks which are causing some resentment in the people towards the new rollout by the sector regulator. In this article, we take a look at a few of the issues that the new pricing regime brings with its implementation.

Troubles for Cable TV Operators Increase

The first and foremost and the fastest impact that we have got to see on the business side of the things is perhaps for the cable operators. In Kolkata, after the rollout of the new tariff regime, things have become tough for the cable operators as they are struggling to keep their operations normal under even with reduced earnings. The earnings for these operators have declined by as much as 45%. While previously they used to earn up to Rs 175 and Rs 200 per subscriber, now they get only Rs 90.

Due to this, the operators are having trouble paying salaries to their workers who collect subscription fee or carry out the maintenance work. These operators have even approached Trai asking for permission to levy a service charge on subscriptions so that they can keep their operations running normally. If the situations remain this way, then it might be possible that the subscribers would have to pay the subscription fee to these operators by visiting their offices. Also to add to the woes, more and more subscribers are transitioning to DTH providers from cable operators, thus delivering another slow dent to these operators.

Monthly Rentals Increase for Subscribers

Although this is an ongoing debate, most subscribers can see the picture clearly. Most consumers have reported that they are now paying more for the same channels which they previously used to watch on a much lower monthly rental. However, there is little that the subscribers can do about this. This phenomenon has already been noted by various surveys and studies which the firms have made. The YouGov study has already highlighted that post the new tariff regime; the subscribers feel more affinity towards the video on demand content services and OTT applications. There is little doubt now that the new tariff regime has slipped its hands deeper into the pockets of subscribers.

Lack of Awareness and Technical Knowhow Become Hurdle

The new tariff regime brought a penetration problem to the industry as all the subscribers in all parts of the country were required to switch to the new system. What made it even more difficult was the fact that the migration required the intervention by the subscriber himself. However, things were difficult for the older age group as they were lost about the migration process to the new Trai tariff regime and lacked the knowledge to use the company website to make channel selections. Also, while the DTH operators simply made a change to their sites to carry this out, the operators had to go the manual way as they made their customers fill out paper forms with channel selections.

The customers who were not able to migrate to the new tariff regime were updated with Best Fit Plans which closely resemble their previous channel selections. Even then, there is a chance that these subscribers might lose out on a few channels. Their monthly bill is also likely to change even though it won’t be more than what it previously was.

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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.

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RavindranDebKGF (Kolar Gold Fields) | Magnum OpusSandyd5aqoep Recent comment authors
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Ravindran
Ravindran

I have given up watching channels. Amazon Prime Netflix and Hotstar provide all the entertainment. A basic connection is retained for the elderly folks at home.

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Calicut
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d2h
KGF (Kolar Gold Fields) | Magnum Opus
KGF (Kolar Gold Fields) | Magnum Opus

The channel owners shot themselves in the foot. Our family has cut plenty of popular channels and after the first 2 days, nobody in my family even cared that we didn’t have a star Kannada or star sports or whatever else there is. Now it would be hard to bring back those people who have left their channels.

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