- One of the controversial areas has been the discount cap on bouquets as compared to a-la-carte channels.
- Lack of proper a-la-carte uptake is a concerning thing for the telecom regulator.
The Trai tariff regime implemented by the DTH sector regulator brought many changes on the backend of the industry by changing prices of channels, bouquets and applying a different regulatory structure altogether. The regulator imposed new laws to guarantee proper choices to consumers. The aim of the new tariff regime implemented by Trai was to provide the consumers with full rights to choose what they want to watch and pay only for these channels. However, even though the new tariff regime gifted this flexibility to the consumers, it also caused a lot of controversy regarding increased prices of channels and monthly subscriptions. In a new consultation paper, Trai has talked about the areas that it is looking forward to patch up in the coming days. The regulator has also invited comments from stakeholders on this consultation paper.
The Dilemma of the Bouquet Discount
Trai’s consultation paper traces the timeline of the new tariff regime and establishes the premise as to why the regulator had to bring in new rules in the first place. To understand the motives of Trai behind this new regulatory measure, we will have to see the previous pricing structure by the broadcasters, which used to push the consumers towards channel bouquets. The consumers used to pay a lot for individual channels as compared to the bundled channels. These bundled channels further used to come with a lot of unnecessary channels which were not required by the consumers. This used to hinder the choice of subscribers. With the new tariff regime, Trai places the channel choices back into the hands of the consumers.
Trai Tariff Regime Went into Effect Without any Discount Cap
In its tariff order of 2017, a maximum discount of 15% was prescribed. Further, Madras High Court had declared that the capping of price of bouquets at 85% of the sum of a-la-carte price of the channels. This was done so that the consumers be in control of what they watch and what they pay for. However, Trai noted that “Though Tariff Order 2017 was implemented without cap on maximum permissible discount, it was expected that broadcasting industry would own more responsibility and consider the concerns of the subscribers while declaring the prices of their channels, in a-la-carte and bouquet basis.”
With this, Trai also posed questions to stakeholders like whether or not flexibility available to broadcasters to give discount on sum of a-la-carte channels forming part of bouquets has been misused to push their channels to consumers, or whether some broadcasters have indulged in heavy discounting of bouquets by taking advantage of non-implementation of 15% cap on discount. The regulator is also going to invite comments on whether or not there is a need to review the cap on discount permissible to DPOs while forming the bouquet and what could be an appropriate methodology for it.
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.