- Trai has strictly said that it will deal severely with operators which violate the new norms
- Many have predicted that the company ARPU will go up in the long term after the new tariff regime
The new pricing framework brought into effect by the Telecom Regulatory Authority of India (Trai) has an impact on multiple levels. On the frontlines, it has definitely changed the pricing pattern of channels and thus the subscription costs for the subscribers. But that’s not the extent of it, the new tariff regime has also brought to effect new norms which stringently change the service charge fees, installation fees, rules for setting up of a customer service line and many more. As such, there is speculation that transparency might not be the only positive result of the new tariff regime. Further, industry experts have speculated that the new tariff regime will increase the ARPUs for the DTH operators in the long term. Here are all the ways the new tariff regime is affecting the industry, except for pricing.
Justified Channel Pricing for Cable Operators of All Sizes
While consumers are at the end of the TV-industry chain, the new rule has certainly tweaked things for the small cable operators as well. Now there might be a mixed reaction to this statement in different locations across the country, but the transparent pricing of channels now ensures that a small cable operator based out of a tier-2 city will pay the same price for the channel to the broadcaster as a prominent DTH provider based out of a metro city. Previously, this was not the case as big players used to enjoy discounted rates from the broadcasters while cable operators were denied such flexible prices thus cutting down their margins, and pushing them further down on the business front.
Change in Viewership of Channels
The change in the viewership pie of channels was undoubtedly surprising news for the industry. Because the consumers were forcibly made to reconsider their channel choices after the new Trai tariff regime, they opted for prioritising the FTA channels over the pay channels thus increased viewership for these free channels. To reduce their monthly subscription, subscribers chose free channels first and then made their pay channels selection based on pure need. Whereas, FTA channels enjoyed extra attention in this regard as their viewership increased from 21% to 26% in the past few weeks.
Niche Channels Vying for More Reach
As the new mandate rolled out in the entire nation and brought changes to the way how companies functioned and prioritised, some of the lesser known niche channels also had to switch up their strategies. While the big players chased revenue and more influx into their companies the niche channels like BTVI, Travelxp and celebrity chef, Sanjiv Kapoor’s Food-Food focused more on viewership and expanded reach. For this move, they sought the way of inclusion into DPO packs. Being aware of the industry trends which hinted towards a broad acceptance of DPO packs over any other choices, the niche channels sought inclusion in these bundles.
Cable TV Repair Rules, Installation Prices and More
Trai has also tightened the Cable TV repair rules along with introducing new pricing mandate for the channels. The regulator has ensured the consumers that if they face a faulty connection, they shoulder register the complaint and the DTH operator should resolve the same within 72 hours. In case that does not happen, the consumer need not pay for the service. Also, Trai has capped the installation and activation charge for new DTH subscribers at Rs 500. If a representative of the company visits your home, then you won’t be required to pay more than Rs 200, mandated Trai.
Increase in ARPU for DTH Companies
With the new Trai mandate, there are also better prospects for DTH companies. Airtel CEO, Gopal Vittal has already said that the company expects to slowly increase its ARPU owing to the new Trai pricing mandate. The same industry trend will affect the entire playing field, and the DTH operators are likely going to enjoy an increased revenue stream from their subscribers in the coming months as the heat of the new rules settles gradually.
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.