Airtel Digital, one of the top television channel distributors in India, has partially complied with TRAI’s tariff order as amended on January 1 this year.
The company has complied with some provisions of the rules, such as reducing the network charge for up to 200 channels, while compliance with other parts of the tariff order is not seen.
Specifically, Airtel Digital customers are being charged a network charge of only Rs 153, including tax, for up to 200 channels — in compliance with the amended tariff order published on January 1.
However, like in case of other DTH providers, other crucial parts of the legislation have not bene implemented yet.
In particular, the new rules prohibit DTH and cable operators from including any channel priced above Rs 12 as a part of their channel packages. However, many channels priced above Rs 12 can still be seen in Airtel’s packages up for sale on the selfcare portal.
For example, the operator’s Hindi Mega pack includes channels such as Zee TV, Star Plus and Sony, all of which are priced at Rs 19.
PRICING PRESSURE
TRAI had directed channels to reduce their channel prices to at least Rs 12 if they wanted to remain as part of various packages. If they did not cut their prices, they would be kicked out of all the packages, TRAI had said.
However, the broadcasters did not reduce the prices of their channels.
Therefore, no cable or DTH operator is supposed to include such channels — which are priced above Rs 12 — in their packs.
TRAI was calculating that cable and DTH operators will obey its rules, and kick out all expensive channels from their packs. Once this was done, TRAI thought, the broadcasters will automatically bring down their channel prices to Rs 12 or below.
However, that calculation has gone awry because of cable and DTH operators not complying with the new rule as TRAI expected.
TRAI made changes to its tariff order after being inundated with complaints from customers alleging that their monthly cable and DTH bills have gone up considerably because of broadcasters raising their channel prices last year.
When TRAI introduced its new pricing system last year, most broadcasters kept the prices of their popular channels at Rs 19 plus tax, or Rs 22.42 — the maximum allowed for a ‘packagable channel’ under the rules.
This led to a sharp increase in the money paid by consumers to channel broadcasters as pay channel charges. According to DTH operator Tata Sky, the amount of money collected from consumers and transferred to channel owners as pay-channel charges jumped by 40%-50% after the introduction of the new tariff order last year.
ROUND ONE FOR BROADCASTERS?
The refusal by DTH and cable companies to remove 19-rupee channels from their packs — as required by the new rules — is a major win for big broadcasters.
These broadcasters had refused to bring down their channel prices to Rs 12 as TRAI expected, despite the threat of these channels being taken out of packages.
Now that cable and DTH companies have not taken these channels out of their packs, this round of battle seems to have been won by big broadcasters/channels, with the TRAI looking like the loser.
If cable/DTH operators continue to include such expensive channels in their packs, there is no reason for broadcasters to cut their prices. That, in turn, is likely to disappoint many consumers who were hoping that TRAI’s new rules would bring down their monthly cable and DTH bills.
The second round of the battle is likely to be fought on Monday, with TRAI expected to send out show cause notices to all cable and DTH operators to comply with the rules published on January 1.
Whether they will comply or not after receiving a notice remains to be seen.
TRAI has the power to impose fines on cable and DTH operators for violating the new rules, but these fines are unlikely to make any significant impact on these companies.
The regulator can also recommend that the licenses of companies that are in violation of the rules be canceled. However, the final call on that will have to be taken by the ministry of information and broadcasting, and it is unlikely that the ministry will take such strong action.
Besides Airtel Digital, Tata Sky, Siti Networks and TCCL which have complied with the new provisions to varying degrees, most cable and DTH players have not complied even partially with the new rules.
