Trai Consultation Paper on Tariff Regime Correction Could Hurt Small Niche Channels and Broadcasters

Trai has floated a consultation paper which points out various issues in tariff regime and invites comments from industry stakeholders on how these can be solved

By August 26th, 2019 AT 3:15 PM
Highlights
  • As per experts, the new consultation paper might force the niche channels to shut shop
  • Trai is suggesting capping of discounts on channel bouquets and keeping an eye on channel pricing

It has not been a lot of time since the Telecom Regulatory Authority of India (Trai) implemented the new tariff regime in the country and now the regulator is already looking towards amending the new regulatory framework. After it faced a backlash from the consumers and some sections of the industry like the MSOs, Trai decided to bring some changes to the new rule. For this, Trai has floated a new consultation paper which invites comments from the industry stakeholders. In this consultation paper, Trai has outlined some issues that the industry is facing currently. As per Trai, the sector is currently facing three major issues, and these include the bundling of channels under bouquets, excessive discounts on the channel bouquets and the lack of consumer choice. However, the new corrections that Trai is proposing might hurt the small channels from Lifestyle, travel and niche television broadcasters.

Trai Suggests Capping of Discount on Channel Bouquets

Trai has also talked about the likely measures that it can take to patch up the issues plaguing the industry. Firstly, Trai has stated that it can cap the discount that can be applied to a channel bouquet. Currently, some of the bouquets are even providing discounts that run up to 50% of the collective price if counted individually. Trai finds a skewed pricing tactic in such a move and is looking to fix it by introducing a discount cap. Another way that Trai might bring a solution is by keeping an eye on the upper cap for individual channel pricing, which is currently set at Rs 19.

Trai has also said that while at large, the broadcasters have followed the channel pricing guidelines, some channels have been priced arbitrarily. A large number of bouquets that are available to the consumers also present excessive choices to the consumers, thus hindering transparency in the industry. However, as per the expert, this move might hurt the small broadcasters who depend on the channel bouquets for more reach.

Corrections in Tariff Regime Might Force Out Small Broadcasters

One of the experts highlighted, “Bouquets allow large as well as independent broadcasters to bundle those channels that are not in the consideration set of consumers along with popular channels. This is a worldwide practice and India is no exception.” As per the industry insiders, if Trai goes ahead with its consultation paper in its current form, then it would surely hurt the small broadcasters, and many might have to shut shop. The other players might have to switch up their business model to survive in such a market. There has already been an opinion floating in the industry that a premature intervention by Trai might hurt the industry even more. The implications of such an early correction in the Trai tariff regime might prove to be hurtful for the DTH operators as well.

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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