The latest tariff order on cable TV pricing from the Telecom Regulatory Authority of India (TRAI) will trigger a massive disruption for the country’s broadcasting industry and lead to job losses as well as closure of smaller, niche channels, the Indian Broadcasting Foundation (IBF) said on Friday, questioning the regulator’s move.
On January 1 this year, TRAI unveiled a 33% cap on discounts that can be offered to cable subscribers opting for a channel bouquet and a pricing cap of ₹12 per channel to be included in a bouquet, down from ₹19 per channel in the current regime. The changes, that also include a restriction on the number of bouquets that can be offered, are slated to kick in from March 2020.
A new tariff regime for cable TV subscribers was introduced just last year by the TRAI with a view to improving choices and bringing down costs for TV viewers — though costs have not necessarily gone down. Customer costs may not go down even after TRAI’s fresh pricing norms, broadcasters reckon.
Viability of pay TV
N.P. Singh, MD and CEO, Sony Pictures Networks India, and president of the IBF, said the fresh changes to tariffs, introduced ‘in less than 12 months,’ will severely impair broadcasters’ ability to compete with other unregulated platforms and adversely affect the viability of the pay TV industry.
Uday Shankar, president of the Walt Disney Company Asia Pacific, and chairman of Star India and Walt Disney India, said the impact of the TRAI’s new diktat would be ‘dramatically disruptive’ in the short and long run, leading to closure of smaller niche channels over a couple of years, thus reducing choice for consumers.
Terming frequent changes in tariff policy ‘a trigger-happy regulatory approach,’ Mr. Shankar said the stated concern about lowering prices for consumers appears misleading as distributors were being allowed to charge ₹160 even for providing free channels.
“These changes are not in line with the stated intent of improving the Ease of Doing Business. Whether it will really benefit end consumers is also (arguable),” noted Punit Goenka, MD and CEO, Zee Entertainment Enterprises Limited.
Sudhanshu Vats, Group CEO, Viacom 18 Media, and IBF vice-president, compared the tariff order changes to a desire to ‘serve a standard Thali for all Indians’ in just the broadcasting sector. “We have grown at less than half the inflation rate since 2003, and therefore, the argument that prices are high is not borne out by data,” he said.
“We supported the New Tariff Order introduced in 2019 though industry was apprehensive of the magnitude of changes… over ₹1,000 crore was spent collectively just to inform consumers what the changes meant,” said Mr. Singh. Consumers and other stakeholders faced considerable inconvenience during the transition and nearly 15 million consumers subscribers have been lost in the process, he pointed out.
