India’s largest DTH operator Tata Sky and smaller rival Sun Direct have missed TRAI’s deadline to introduce new, more transparent channel prices to their subscribers from midnight.
Even as other cable and DTH players, like Airtel Digital, Dish TV, D2h, Hathway, Den Networks, Siti Cable and GTPL started displaying the new prices for TV channels, these two operators have not.
UPDATE: Sun Direct has announced its channel and pack prices.
According to TRAI’s order dated July 3, all cable and DTH operators were supposed to declare new channel and pack prices to their customers from today. Customers would then decide which channels they wanted to keep, based on these prices.
Customers were supposed to see the prices of individual channels on screen when they switched from one channel to another. Players like Dish TV, Airtel Digital, Den, Hathway and Siti Cable are showing the prices of the channels on the on-screen EPG when consumers switch channels.
However, on Tata Sky and Sun Direct, no prices are seen on screen when the channels are changed. This is despite a reminder from the regulator just two days ago to all DTH and cable players.
TRAI had on Friday reminded all cable and DTH operators that they must comply with its deadline to introduce the new tariff scheme ‘strictly’ and that its relaxation of the time table was only for the process of shifting all subscribers to the new plans. Other activities, such as the declaration of the selling price of channels by DTH companies, must be completed by Dec 29, TRAI had clarified.
“The Authority once again emphasize that all the provisions of the Interconnection Regulations 2017, the QoS Regulations 2017 and the Tariff Order 2017 are in force and the regulatory provisions contained therein may be strictly complied with while implementing the prescribed schedule of activities. Accordingly, DPOs shall declare the Distributor Retail Price (DRP) and Network Capacity Fee (NCF) as per the time lines given in TRAI press release dated 3rd July 2018 i.e. by 29th December 2018.”
It is not clear why Tata Sky and Sun Direct failed to comply.
UPDATE: Public relations firm Genesis Burson-Marsteller responded to this article, and said it was speaking on behalf of Tata Sky.
The agency essentially pointed out that TRAI’s actual Gazette notification on Friday had negated the original 180-day deadline and therefore, there was no deadline on Dec 29.
On examination, we have come to the conclusion that they have a point, and that TRAI may be mistaken in its assumption that there was a deadline on Dec 29.
In the original notification, the TRAI had said that the notification would come into effect in 180 days after it was published.However, in its amendment published on Friday, the authority substituted the above statement containing the 180-day deadline with a series of new statements to the effect that the deadline to move consumers to the new tariff plans is now moved to January 31. Since it was a substitution and not an insertion, the original tariff order — as amended on Friday — no longer has any mention of “180 days” (irrespective of what the TRAI has said in its press release on the subject). In the amendment too, there is no mention of a 180-day deadline.
In our opinion, therefore, Tata Sky has a strong case to make that after the amendment on Friday, there is no 180 day deadline (which fell on Dec 29). Also in our opinion, it is quite possible that TRAI will not be able to take any action on any DTH provider that does not release pricing details till January 31, and Tata Sky may be on strong legal grounds to argue that the Dec 29 deadline is now no longer valid as it has been substituted out of the tariff order via the amendment. Statements in a press release are unlikely to have a binding authority over the distribution companies.
Earlier, Tata Sky had challenged the applicability of the new rules, but had failed to get a stay on their implementation.
Another attempt to stop the new scheme by Star India met with partial success, but even there, the Madras High Court upheld most of TRAI’s new rules.
The part upheld by the High Court court included the requirement that cable and DTH operators must display individual channel prices, and that they cannot charge a higher price for any channel than what has been declared by the channel owner.
In preparation for today, all channel owners including Star India and Zee Enterprises have declared new prices for their channels over the last two months.
DTH and cable providers are supposed to use these prices to arrive at a suitable price for their customers and display the same. To make sure that consumers are made aware of the new rates, the MRP is to be shown against the name of the channel.
The new rules were introduced to stop cable and DTH operators from overcharging for channels. Many DTH players were charging as much as Rs 75 for a single channel, even when the channel owner was supplying the channel at just Rs 4.
ONE STEP AT A TIME
The onscreen display of channel prices is only the first step in migrating customers to TRAI’s new tariff scheme.
Over the next 33 days, customers have to choose new packs, or create their own packs, based on these displayed prices. By the end of January, all subscribers are supposed to have moved to the new prices and packs.
From February 1, it will be illegal for all cable and DTH players to charge a higher price for any channel than what has been declared by the channel owner.
However, with subscribers of Tata Sky and Sun Direct not able to see the new prices, it is not clear how they will be able to select their packs and shift to the new plans before February 1.
Customers who do not shift to the new pricing mechanism risk losing access to their channels on Feb 1.
It should be kept in mind that even as the other DTH and cable players have started showing the new prices, most of them are yet to update their core billing and provisioning software.
As a result, even as consumers are able to see the new prices, it will take a couple of days for them to be able to activate the new packs and channels at the displayed prices.
PRICING DETAILS
As a part of the move to the new regime, some channel owners have declared very low rates for their offerings, while others have kept it relatively high.
TV18 has, for example, has declared a price of Rs 1 per month for CNBC TV18 Prime HD channel. This is far lower than existing prices. The channel, for example, is currently listed at Rs 100 per month on Tata Sky’s website.
Similarly, Times Network has declared a price of Rs 5 per month for Times Now HD. The channel was being sold for Rs 51 per month by Airtel Digital and Rs 30 by Tata Sky.
From February 1, all these channels can be sold only at less than or equal to the price declared by the channel owner.
Similarly, around 500 channels have declared their price to be zero, meaning that customers do not have to pay anything over their ‘network charges’ for watching these channels.
Some of the platform providers, including cable and DTH operators, are unhappy with the new system under which they cannot charge more than the price announced by the channel owner.
They feel that they have the right to price the channels as they see fit, and that the channel owner does not have the right to decide the ultimate selling price.
TRAI was of a different opinion, and said that no cable or DTH operator had the right to charge a price higher than what was authorized by the channel owner.
It pointed out that in all industries, it is the manufacturer that decides the price of a commodity, and not the retailer. In case of a biscuit, for example, it is Britannia or ITC that decides the maximum retail price, and retailers cannot charge Rs 100 for a biscuit that they get at Rs 1.
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