[Expert]

A la carte menu for DTH subscribers at Rs. 150

NEW DELHI: Direct-to-home (DTH) subscribers will soon have an a la carte menu of channels to choose from, but will have to pay a minimum fee of Rs. 150 a month.

The Telecom Regulatory Authority of India (TRAI) has issued its tariff order for 2010, for digital addressable systems – such as DTH and IPTV – and has insisted that customers must be given free choice of pay channels, than be forced to pick from a bunch of pre-set bouquet arrangements.

The change must be made by September this year and the final deadline will be January 2011 if operators needed extra time for technical upgrade.

Service providers have been told to publish channel rates every three months, with a 30-day notice period for any changes. If they want to fix a monthly minimum subscription, the bill cannot exceed Rs. 150.

TRAI has also told broadcasters that they can charge DTH operators only 35 per cent of the fee they charge regular cable TV operators for their channels. This is because DTH allows an accurate record of subscribers opting for different channels, unlike the regular cable TV, where broadcasters must rely on the data reported by operators.

The tariff order comes a day after TRAI told the Supreme Court that it plans to cap regular cable TV charges at Rs. 250 per month. The regulatory agency has also submitted its recommendations on the government's uplinking-downlinking policy, now under review.

TRAI feels there should be no cap on the number of satellite-based TV channels allowed to uplink or downlink content in India.

[Expert]

Broadcasters to challenge TRAI tariff order on channels
Stung by TRAI's latest directive which mandates them to make available channels for addressable systems such as DTH and IPTV at 35 per cent of the corresponding rates for the analogue cable operator, television broadcasters plan to challenge the regulator's tariff order soon.

“There is no basis for arriving at the pricing. Legal heads of broadcasters will meet next week to look into this issue and we plan to challenge the TRAI tariff order,” said Mr Jawahar Goel, President, Indian Broadcasting Foundation, the apex body of broadcasters.

Industry sources said the TRAI tariff order will reduce broadcasters' income by 15 per cent. Currently, the channels are made available by the broadcasters to DTH operators at 50 per cent of the normal price charged to a cable operator.

The implementation of the TRAI's tariff order, which also mandates digital platforms such as DTH and IPTV to offer pay channels on a la carte basis, would boost the earnings of DTH operators. The order will come into effect from September 1 and DTH operators would offer pay channels on a la carte basis to consumers latest by January 1 next year. TRAI has stipulated that the monthly minimum subscription fee should not exceed Rs 150.

“The order would help DTH companies to boost their revenues and reduce losses. At the same time it would eat into broadcasters' revenue, who will oppose it,” said Mr A. Mohan, Executive Vice-President and Head of Corporate Affairs at Essel Group.

However, DTH players would have to incur an additional investment in their IT backend systems, especially in reconfiguring their subscriber management and billing systems to offer channels on an individual basis.

For DTH players, analysts said, reduction of 15 percentage points in content fee would help improve their margins as their content acquisition costs would decline further. Also, the cap of Rs 150 on minimum monthly fee should help operators retain their subscriber base. The current average revenue per subscriber ranges between Rs 40 and Rs 450 for different DTH players.

“The move to bring down the wholesale price of channels for addressable system is very welcome for the DTH industry. This is small but significant step in the right direction to enable India digitise faster,” an official at Airtel Digital TV said.

“However, as the level of under declaration is far higher in the analogue market, our request was to bring the DTH wholesale rates to 15-20 per cent of the wholesale rates applicable for analogue cable, to provide a level playing field and enable the DTH sector fasten the curve to scale and profitability,” the Airtel official added.

[Expert]

Trai caps a la carte channel price at 35% of non-Cas
MUMBAI: The Telecom Regulatory Authority of India (Trai) has capped the a la carte pricing of channels for addressable systems at 35 per cent the cost in non-Cas areas, a step that will bring down the content cost for DTH, digital cable and IPTV operators.

The earlier rate for DTH operators was fixed at 50 per cent of pricing in non-Cas areas.

In its new tariff order today, applicable to all broadcasting and cable services provided to subscribers through addressable systems, Trai said that every broadcaster shall offer all its pay channels on a la carte basis to distributors of TV channels, and specify the a la carte rate for each pay channel.


The broadcast sector regulator said that the charges payable by a cable operator to a multi system operator (MSO) or to a HITS (Headend-In-The-Sky) service provider, as the case may be, shall be as determined by mutual agreement.

Trai said that every service provider providing broadcasting services or cable services to its subscribers using an addressable system shall, from the date of coming into force of the order, offer all pay channels offered by it to its subscribers on a la carte basis and shall specify the maximum retail price for each pay channel.

However, to provide some relief to the operators, the order has fixed Rs 150 as the minimum monthly subscription for any number of channels. The channels of Doordarshan should be a compulsory part of each bouquet, it said.





DTH players, who might be unable to offer all pay channels to subscribers on a la carte basis due to any technical reason, will have to do so by 1 January 2011.


To protect the subscribers, Trai has also said that no service provider, who provides broadcasting services or cable services using an addressable system, can increase the charges for a subscription package for a minimum period of six months from the date of enrolment of the subscriber. However, it does not prevent any service provider from reducing the price of the subscription package within the period of six months.

Trai refrained from fixing the retail tariff for the pay channels. It said that as the market forces are operating effectively, the authority is of the view that there is no need for regulatory intervention in the matter of retail tariff fixation at present.

Also, the broadcaster will have to specify a minimum subscription period not exceeding three months for a subscriber.

Trai also said that every broadcaster shall report to the authority, the a la carte rates for its pay channels fixed by it. They will have to publish such rates on their web site. Any changes will have to be reported 30 days prior to the change.

Also, any broadcaster of a free to air channel intending to convert the channel into a pay channel or vice-versa will have to inform Trai, give public notice about the intended conversion and run a scroll at periodic intervals on the channel proposed to be converted.

Every broadcaster will have to publish full details about the channels provided by it, the nature of each channel, i.e., whether it is a free to air or pay channel, the a la carte rate of each pay channel and the bouquet rates for bouquets of channels, if any, for distribution through addressable platforms - at least once in three months, in at least two national newspapers.

Multi-system operators (MSOs) are still trying to figure out what they have to gain from the new tariff order. Though they have to pay 35 per cent wherever they introduce addressable systems, the technicality of it is under question in non-Cas areas.

Broadcasters feel the sector regulator has been unfair to them as they have to price their channels at a maximum that is 35 per cent of their non-Cas rates.