ITV

Category: TRAI

  • Broadcasters satisfied with inter-connect agreements negotiations with MSOs

    Broadcasters satisfied with inter-connect agreements negotiations with MSOs

    NEW DELHI: Broadcasters, who met officials in the Telecom Regulatory Authority of India (TRAI) have expressed satisfaction over negotiations with multi system operators (MSOs) for entering into inter-connect agreements with them.

     

    The meeting was in keeping with a commitment made by TRAI at the last meeting of the Task Force for implementation of Phase III of the Digital Addressable System (DAS).

     

    The broadcasters included Star India and TV18, who expressed satisfactory progress in their meetings with MSOs. 

     

    It is learnt that TRAI also met MSOs in this connection.

     

    This was the second meeting with broadcasters after the last Task Force meeting held on 23 June.

  • TRAI asks pay broadcasters to revise wholesale tariff, even as matter pending in SC

    TRAI asks pay broadcasters to revise wholesale tariff, even as matter pending in SC

    NEW DELHI: Fifty-four pay broadcasters were today asked by the Telecom Regulatory Authority of India (TRAI) to revise their wholesale tariff for the non-CAS (Conditional Access System) and DAS (Digital Addressable System) areas to what existed before the coming into force of the two tariff orders that have been set aside by the Telecom Disputes Settlement and Settlement Tribunal (TDSAT).

     

    TRAI, which also met some of the broadcasters in a meeting today, said the revised tariff should be filed with the Authority within 10 days from the date of receipt of the letter.

     

    The TDSAT order had been challenged before the Supreme Court, which on 16 May declined to stay the order setting aside the amendments in two tariff orders, which had sought to put an inflation-linked hike of 27.5 per cent on addressable and non-addressable systems.

     

    TDSAT chairman Aftab Alam and member Kuldip Singh said in their order of 28 April that the ‘The Telecommunication (Broadcasting & Cable) Services (Second) Tariff (Eleventh Amendment) Order, 2014’ and ‘The Telecommunication (Broadcasting & Cable) Services (Second) Tariff (Thirteenth Amendment) Order, 2014]’ were “untenable.”

     

    The Tribunal also said it thought that TRAI “will be well advised to have a fresh look at the various tariff orders in a holistic manner and come out with a comprehensive tariff order in supersession of all the earlier tariff orders.”

     

    In its letter placed on its website, TRAI said that the increase of 27.5 per cent in non-addressable systems had led to a similar increase in addressable systems in accordance with the provisions of the Telecommunication (Broadcasting and Cable) Services (Fourth) (Addressable Systems) Tariff Order of 21 July, 2010.

     

    TRAI in the Telecommunication (Broadcasting & Cable) Services (Second) Tariff (Eleventh Amendment) Order of 31 March, 2014 allowed an inflationary increase of 15 per cent in the wholesale prices for non-addressable systems over the prices prevailing as on 31 March, 2014 to be effective from 1 April, 2014 and 12.5 per cent with effect from January 2015 under the Telecommunication (Broadcasting & Cable) Services (Second) Tariff (Thirteenth Amendment) Order of 31 December, 2014. 

  • TRAI publishes handbook on broadcasting & cable services to protect consumers’ interests

    TRAI publishes handbook on broadcasting & cable services to protect consumers’ interests

    NEW DELHI: With just five months left for completion of Phase III of Digital Addressable Systems (DAS) for cable TV, the Telecom Regulatory Authority of India (TRAI) has received several queries about the broadcasting and cable TV sector.

     

    Aiming to answer as many of these queries, TRAI has brought a booklet on Frequently Asked Questions with the aim of protecting consumers’ interests and recognising that consumers and consumer organisations must be empowered with knowledge and awareness of the comprehensive regulatory measures laid down by it for Broadcasting and Cable TV services.  

     

    The ‘FAQs on Broadcasting and Cable TV Services’ booklet is in simple and consumer friendly language to enable easy understanding. 

     

    It provides consumers with a gist of the relevant regulations and orders pertaining to Broadcasting and Cable TV services. Salient aspects that are covered in this handbook include procedures for connection, disconnection, transfer, shifting, complaint registration and billing.  

     

    In a press note, TRAI noted that consumer awareness was one of its primary tasks and the handbook was aimed at fulfilling this mandate. 

     

    TRAI has, from time to time issued Regulations, Directions and Orders on consumer protection, complaint redressal systems, Quality of Service (QoS), tariffs and billing.

     

    TRAI’s endeavour is to facilitate the availability of affordable Broadcasting and Cable TV services while ensuring that the quality that is provided by the service providers to the consumers is satisfactory.

  • Post TDSAT order, TRAI issues fresh paper on tariff for commercial subscribers

    Post TDSAT order, TRAI issues fresh paper on tariff for commercial subscribers

    NEW DELHI: The Telecom Regulatory Authority of India (TRAI) has asked commercial subscribers whether there is need to define and differentiate between domestic subscribers and commercial subscribers for provision of TV signals and the basis for such classification.

     

    In a paper on “Tariff issues related to Commercial Subscribers”, the regulator has also asked if there is a need to enable engagement of broadcasters in the determination of retail tariffs for commercial subscribers on a case-to-case basis.

     

    The paper has been issued following the directions by the Telecom Disputes Settlement and Arbitration Tribunal (TDSAT) earlier this year that there was need for a fresh look at tariff orders. Stakeholders have been asked to give their comments by 31 July and counter-comments by 7 August.

     

    TRAI has sought information on how it can be ensured that TV signal feed is not misused for commercial purposes wherein the signal has been provided for non-commercial purpose. 

     

    It has also asked if there is a need to have a different tariff framework for commercial subscribers (both at wholesale and retail levels) and what should be the suggested tariff framework for commercial subscribers (both at wholesale and retail levels).

     

    It wants to know if the present framework is adequate to ensure transparency and accountability in the value chain to effectively minimise disputes and conflicts among stakeholders, and what should the practical and implementable mechanism be to ensure transparency and accountability in the value chain. 

     

    Following the Supreme Court’s order of 16 April, 2014, TRAI had notified the Telecommunication (Broadcasting and Cable) Services (Second) tariff (Twelfth   Amendment) order & the Telecommunication (Broadcasting and Cable) Services (Fourth) (Addressable Systems) Tariff (Fourth Amendment) order on 16 July, 2014. These two tariff amendment orders prescribing the tariff framework for commercial subscribers were challenged before TDSAT, which in its order of 9 March, 2015 had set aside these Tariff Amendment Orders. TRAI was asked to examine the issue afresh and come out with a new tariff dispensation for commercial subscribers within six months from the date of its order.

  • FY-2015: Radio industry numbers the best as yet?

    FY-2015: Radio industry numbers the best as yet?

    Has the Indian radio industry put in its best performance as yet? Preliminary conclusions based on the results filed by a few of the listed and segments of listed companies seem to indicate so, as do extrapolations of data from the Telecom Regulatory Authority of India (TRAI) that is as yet available until Q3-2015.

    Note (1): (a)100,00,000 = 100 lakh = 10 million = 1 crore

    (b) The author has taken the liberty to introduce two new measures – average revenue per radio station and average operating profit per station. These are rough yardsticks and may not necessarily be indicative of a station or a network’s performance, because factors such as geography and market conditions within the area of operations are among many other factors that will also determine performance.

    CAGR since FY-2012 is likely to be between 11 and 12%: TRAI data

    As per data from TRAI, radio advertisement revenue has been increasing every quarter. Please refer to Fig A below, which shows ad revenue for a 15 quarter period starting Q1-2012 (quarter ended 30 June, 2012) until Q3-2015 (quarter ended 31 December, 2014). Ad revenue of Rs 450.95 crore for Q4-2015 has been calculated using the average percentage increase between Q3 and Q4 over three years (FY-2012, FY-2013 and FY-2014) – this works out to 1.76 per cent.

    Ad revenue of Rs 487.34 crore for Q4-2015 (quarter ended 31 March, 2015) is the projected revenue by the linear trend line in Fig A-1, which is based on the revenue of the first three quarters of FY-2015. This shows a growth of 19.75 per cent over FY-2014. This figure is quite close to the average (simple) revenue growth of 19.93 per cent by the six sample companies whose figures have been considered later in this report. (At the time of filing this report, TRAI had not released data for Q4-2015. It must also be pointed out that TRAI has been releasing ad revenue data for lesser than the licensed number of radio stations, as indicated in the second line of the X axis in Fig A below.)

    The trend line in Fig A indicates that ad revenue is increasing linearly. The figure also indicates that the radio industry has had its lowest quarter in terms of ad revenue in Q1, progressively increasing in Q2 and Q3, with the highest ad revenue in Q4 in FY-2012 and FY-2013. There could be various reasons for this and some that come to mind are that Q4 is the fag end of the financial year and advertisers use this very local medium to push through sales and attain year end targets for better margins. It could also mean that some advertisers already consumed a major portion of their ad budgets and are using the low cost alternative for grabbing consumer attention. However, in FY-2014, Q4-2014 ad revenue was lower than Q3-2014 by 1.02 per cent. Assuming the same trend is followed this year too, the projected ad revenue for Q4-2015 works out to about Rs 438.63 crore.

     

    Based on the lower projected figure of Rs 438.63 crore, projected ad revenue for FY-2015 works out to Rs 1636.03 crore, and hence 16.29 per cent more than the Rs 1406.82 crore in FY-2014. Ad revenue in FY-2014 had grown 17.36 per cent from Rs 1198.77 crore in FY-2013. Since 2012, the industry’s ad revenue has shown a CAGR of 11 per cent if one were to consider the lower projected ad revenue of Rs 438.63 for Q4-2015.

    If we consider Q4-2015 ad revenue as Rs 450.95 crore indicated in Fig A above, revenue for FY-2015 is Rs 1648.35 crore and CAGR works out to 11.21 per cent between FY-2012 and projected FY-2015 ad revenue.

    If we consider the projected ad revenue for Q4-2015 as Rs 487.34 crore, then projected revenue for FY-2015 is Rs 1684.74 crore and CAGR between FY-2013 and FY-2015 (proj), works out to 11.82 per cent.

    As mentioned above, based on TRAI quarterly ad revenue data, total ad revenue works out to Rs 1406.82 crore for FY-2014 and the average ad revenue per station as Rs 5.92 crore for 237.5 stations. Please note that TRAI data for Q1-2014 and Q2-2014 was for 237 stations and for Q3-2014 and Q4-2015 for 238 stations and hence a not very accurate median of 237.5 stations has been used to calculate the average ad revenue per station for FY-2014 above. 

    Based on the projected ad revenues for FY-2015 of Rs 1636.03 crore, Rs 1648.35 crore, 1684.74 crore for 241 stations, the corresponding projected average ad revenues per station works out to Rs 6.79 crore, Rs 6.84 crore and Rs 6.99 crore respectively.

    Let us look at how a few radio groups performed:

    Note (2):  (a) This report considers PAT posted by two radio companies (ENIL – Radio Mirchi, 32 radio stations; Jagran Prakashan – Radio City – 20 radio stations)  and their operating results, along with operating results of DB Corp (My FM, 17 stations), B. A. G Films (Radio Dhamaal, 10 stations) and HT Media (Fever FM, 4 stations).

    (b) EBIDTA numbers for ENIL (Mirchi) have been calculated by adding the depreciation to the total income from operations and subtracting the total expense from the result, assuming that ENIL reports interest in finance charges separately.

    The numbers in the charts below cover just 89 FM broadcasting stations of six sample companies of the total of 241 or 36.93 per cent. 

    It is interesting to note that Radio Mirchi with just 32 stations (13.5 per cent of total number of stations of 237 in FY-2014 as per TRAI) contributed revenue of Rs 384.49 crore to a total ad revenue of Rs 1406.82 crore in FY-2015, or 24.77 per cent of total ad revenues of the industry, that is assuming that all of Radio Mirchi’s total income from operations is ad revenue.

    Another great performer, Music Broadcast Private Limited (MBPL, now a part of the Jagran Prakashan group), Radio City with 20 stations (or 8.44 per cent of the total number of stations in FY-2014 of 237 as per TRAI) reported revenue of Rs 160.53 crore or 11.41 per cent of the ad revenue for FY-2014 as per TRAI data, again assuming that all of Radio City’s total income from operations is ad revenue.

    Of course, some of these companies/segments also have revenue streams other than radio advertisement, for example, Radio Mirchi conducts the Mirchi Music Awards every year and must also be reporting sponsorship revenue, but considering that many, and especially Radio Mirchi, My FM, Radio City and Fever FM are parts of some of the biggest professionally-run media houses in the country, these entities will be able to leverage a reasonable amount of money from other streams. A few of the entities also have internet radio stations that have turned quite popular, more so among the Indian diaspora.

    Y-o-y, Q2-2015 was the best quarter in terms of revenue for five (except Radio City, whose numbers for Q1-2015 and Q2-2015 were not available at the time of writing of this report) of the six entities. Combined Q2-2015 revenue for the five entities was Rs 157.12 crore, 20.05 per cent more than the Rs 130.88 crore in Q2-2014. If one were to neglect the loss reported by Oye FM and Radio Dhamaal during the quarter, then the operating profit/PAT for My FM, Radio Mirchi (PAT) and Fever increased by 80.56 per cent as compared to the previous year.

    Income of the six entities

    Combined Operating Income of the six sample companies in this report grew 17.34 per cent in FY-2015 to Rs 886.05 crore from Rs 738.05 crore (52.46 per cent of the total ad revenue as per TRAI for FY-2014). As mentioned above, the simple average growth in revenue for the six companies was 19.93 per cent. Please refer to Fig B below.

    The highest growth was by BAG Films Radio Dhamaal with a revenue growth of 47.09 per cent in FY-2015 to Rs 7.48 crore (0.86 per cent of Operating Income of the six sample entities in this report in FY-2015) from Rs 5.09 crore (0.69 per cent of Operating Income of the six sample entities in this report in FY-2014). Oye FM grew the least – its operating income increased 0.64 per cent to Rs 15.48 crore (1.79 per cent of Operating Income of the six sample entities in this report in FY-2015) from Rs 15.38 crore (2.08 per cent of Operating Income of the six sample entities in this report in FY-2014). My FM, Radio Mirchi and Radio City showed double digit growth in operating income in FY-2015 of 20.68 per cent, 14.04 per cent and 30.42 per cent respectively, while Fever FM’s operating revenue grew 6.72 per cent in FY-2015 as compared to FY-2014.

    Operating Results -PAT and Margins of the six entities

    Combined Operating result – of the six entities – operating profit grew 33.07 per cent to Rs 260.43 crore in FY-2015 from Rs 195.71 crore in the previous year. Four of the six sample entities reported growth in operating profit in FY-2015 as compared to FY-2014, while the other two reported lower operating loss in the current year (FY-2015) as compared to the previous year.

    Please refer to Fig C and Fig C1 below.  Radio Mirchi’s operating profit in FY-2015 of Rs 145.34 crore (55.81 per cent of combined operating profit of six entities in FY-2015) was 16.59 per cent more than the Rs 124.66 crore (63.7 per cent of combined operating profit of six entities in F-2014). Its operating margin in FY-2015 improved marginally to 33.15 per cent from 32.42 per cent in the previous year. Radio Mirchi’s operating margin was the highest for both the years among the six entities considered in this report.

    Radio City’s operating profit in FY-2015 increased 52.3 per cent to Rs 64.86 crore (24.9 per cent of combined operating profit of six entities in F-2015) from Rs 42.60 crore (21.77 per cent of combined operating profit of six entities in FY-2014 FY-2014). Its operating margin improved to 30.98 per cent in FY-2015 as compared to the 26.54 per cent in the previous year.

    My FM reported a 51.89 per cent growth in operating profit to Rs 31.23 crore (11.99 per cent of operating profit-reported by the six sample entities in this report in FY-2015) from Rs 20.56 crore (10.51 per cent of operating profit-PAT reported by the six sample entities in this report in FY-2014). Its operating margin increased to 32.57 per cent from 25.88 per cent in FY-2014.

    Fever FM’s operating profit grew 37.07 per cent to Rs 29.21 crore (11.22 per cent of operating profit-PAT reported by the six sample entities in this report in FY-2015) from Rs 21.31 crore (10.89 per cent of operating profit-PAT reported by the six sample entities in this report in FY-2014). Its margin increased to 29.39 per cent from 22.88 per cent.

    It may be noted that ENIL (Radio Mirchi) reported profit after tax of Rs 105.97 crore (24.2 per cent of Total Income from Operations or TIO) in FY-2015, which was 26.99 per cent more than the Rs 83.45 crore (23.32 per cent of TIO) in the previous year. Further, Radio City also reported a doubling of PAT in FY-2015 to Rs 42.95 crore (20.51 per cent of TIO) from Rs 21.45 crore (13.36 per cent of TIO) in FY-2014.

    Results per station

    As mentioned above, these measures are rough yardsticks and may not necessarily portray a true picture of a station or a network’s performance.

    The average revenue per station for all the 89 radio stations of the six entities in this report grew to Rs 9.73 crore in FY-2015 from Rs 8.29 crore in the previous year. The average operating result per station based on EBIDTA for all the companies increased to Rs 2.93 crore in FY-2015 from Rs 2.20 crore in the previous year.

    Please refer to Table A below for details of the six entities. Fever FM reported the highest revenue per station in both FY-2015 and FY-2014 at Rs 24.84 crore and Rs 23.28 crore respectively. The next highest revenue per station was Radio Mirchi with 32 stations and revenue of Rs 13.70 crore and Rs 12.02 crore in FY-2015 and FY-2014 respectively.

    Radio City’s average revenue per station improved to Rs 10.47 crore in FY-2015 from Rs 8.03 crore in the previous year, when it was lower than the average revenue per station of the six entities in this report.

    Fever FM also reported the highest operating profit per station at Rs 7.30 crore in FY-2015 as compared to the Rs 5.33 crore per station in FY-2014. The next highest on this parameter was Radio Mirchi. On considering its standalone EBIDTA for FY-2015 at Rs 145.34 crore based on the numbers reported by the company on the bourses, Radio Mirchi’s average operating profit per radio station works out to Rs 4.54 crore. For FY-2014, Radio Mirchi EBIDTA was Rs 124.66 crore and its average operating profit per station was Rs 3.90 crore. Radio City’s average operating profit per station works out to Rs 3.24 crore in FY-2015 as compared to the Rs 2.13 crore in FY-2014.

    Conclusion

    As per the FICCI-KPMG Media and Entertainment 2015 report (FICCI M&E 2015 report), the radio industry saw a phenomenal growth of 17.6 per cent in 2014. The report pegs the radio industry size for 2014 in India at Rs 1720 crore (Rs 7.24 crore average revenue per station on a base of 237.5 stations). With the implementation of phase III, FM radio will reach 85 per cent of India’s territory, further adding the medium as an important part of advertisers’ plans because radio is likely to be a cheaper alternative due of its reach. More stations are also likely to result into stronger regional networks.

    Although, phase III auctions have been curtailed to just 135 stations in 69 cities and further delayed to the latter half of fiscal 2015, the industry feels that phase III could herald a new era for radio in India. 

    The FICCI M&E 2015 report says that growth in 2014 could be attributed to several reasons that include new upcoming sectors like e-commerce and industries such as real estate, retail and lifestyle products. As per the report many of the players reached 100 per cent inventory utilisation and hence hiked ad rates. There seems to a welcome change for the industry, which saw advertisers shift focus from nationwide brand building to more local focused promotional targeting, feeding on the strength of radio as a medium. Content innovation also contributed to the strong performance by many players. The general elections of 2014 also saw election spends finding its way to the radio industry with spends of around 12 to 15 per cent of ad budgets as opposed to the normal one to three per cent. Prime Minister Narendra Modi’s address to the nation on All India Radio through his show ‘Mann ki Baat’ has gained a lot of attention for the medium.

    Challenges continue to hound the industry with smaller and standalone stations feeling the pressure of rising cost structures, measurement and royalty fee issues and the rising threat of the digital media eating into the radio ad budget pie. The good news is that now advertisers see radio as an integral part of their media plans, not just an add-on expense head.

    So while FY-2015 is the best year yet for the radio industry so far, but the future is far brighter for the industry and its ecosystem, delays in phase III could dim the brightness, though.

  • TRAI to resolve disputes between MSOs & broadcasters on interconnect agreements

    TRAI to resolve disputes between MSOs & broadcasters on interconnect agreements

    NEW DELHI: The Telecom Regulatory Authority of India (TRAI) is holding a meeting on 14 July to resolve any issues between broadcasters and multi system operators (MSOs) relating to interconnect agreements.

     

    The Information and Broadcasting Ministry (I&B) has asked all broadcasters and MSOs facing such problems to bring this to the notice of TRAI by 10 July.

     

    The TRAI representative who had attended the ninth Task Force Meeting for implementation of Digital Addressable System (DAS) in phase III areas on 7 July had given this assurance.

     

    The MSO has been asked to indicate the name of the broadcaster with whom there are any specific issues so that the representative of that broadcaster may also be called for the meeting.

     

    The exact time of the meeting would be conveyed by TRAI to the participants through e-mail after receiving the representation. 

  • TRAI asks MSOs to devise rational channel rates for phase III

    TRAI asks MSOs to devise rational channel rates for phase III

    MUMBAI: Close to 61 multi system operators (MSOs) have approached the broadcaster for signing of interconnect agreements. The statistics were revealed at the eighth task force meeting by the Telecom Regulatory Authority of India (TRAI) advisor Sunil Kumar Singhal.

     

    Of these, according to the report received by Singhal, while the broadcasters have given their replies to the MSOs, the memorandum of understanding (MoU) is yet to be signed. The TRAI through its meetings with the MSOs and broadcasters, has identified four core issues relating to interconnect agreements. These are:

     

    1. While the MSOs are expressing interest for getting signals from broadcasters, they are being asked for more information, which is taking time. “Now with the intervention of TRAI, broadcasters have formalized their formats and have placed them on their websites so that all MSOs can submit requests at one go and the agreement signed,” informed Singhal.

     

    2. The distributors of several broadcasters in a state are also MSOs and that has led to conflict of interest with the MSOs. “We have been able to address this by seeking the details of the core team of the broadcasters to be approached for getting the signals and the broadcasters have provided such details also on their websites,” he said.

     

    3. The third point was related to pending dispute between MSOs in DAS areas which are both old as well as new. “These disputes need to be resolved mutually as TRAI would not intervene in such disputes,” he opined.

     

    4. There are differences between MSOs and broadcasters on the rate of channels.   “The larger MSOs are in negotiations with broadcasters to finalise the prices and it is indicated that they will be in a position to finalise them by mid June,” he said.

     

    Meanwhile, TRAI has asked the MSOs to devise means to have rational rates for phase III areas, as the rates for phase I and II cannot be workable in the remaining phases.

     

    The TRAI advisor also informed the task force meeting that there was confusion between both MSOs and broadcasters which related to the modus operandi for entering into agreements during the transition period.  The TRAI advisor said that the MSOs and broadcasters were business entities who should know how to communicate with each other in order to expedite and facilitate their business interests. The TRAI has asked the stakeholders to not repeat the mistakes of phase I and II by deploying pre-activated STBs.

     

    The representative of the MSOs, during the meeting said that whatever be the rate declared by broadcasters, TRAI should come out with a non-discriminative clause which should not push packages but allow the channels to be on a-la-carte basis. “We have been insisting on a-la-carte and not bundling of channels and any delay in the implementation of DAS will result in losses to both MSOs and broadcasters,” informed the TRAI advisor.

     

    According to a MSO representative, the packaging of channels should be monitored by TRAI. “The LCOs should be trained to spread DAS amongst the consumers as they are close to the consumers and can speedup this process,” opined the MSO representative.

     

    Information and Broadcasting Ministry (I&B) additional secretary JS Mathur, who was also chairing the meeting said that the publicity campaign for the cutoff date for phase III should start now.

     

    According to Siti Cable Network’s Anil Malhotra, while the target rate of seeding set top boxes (STBs) requires to be around 2 to 3 lakh per day, the present rate of seeding is about 20-30 thousand boxes which is way short and logistic support has to be planned out in order to step-up the pace of seeding.

     

    During the meeting, a representative from BIS raised the issue of hacking of STBs and said that a request has been received from some broadcasters to strengthen the BIS Standard of STBs.

  • TRAI Chairmanship: An onerous responsibility fraught with delicate diplomacy & balancing acts

    TRAI Chairmanship: An onerous responsibility fraught with delicate diplomacy & balancing acts

    NEW DELHI: For any bureaucrat assigned to an autonomous organization under any Ministry, the biggest problem is to ensure smooth functioning between the Ministry and the organization.

     

    Even as Ram Sewak Sharma, a 1978-batch IAS officer of Jharkhand cadre who is currently serving as secretary in the Department of Electronics and Information Technology appears to be the favourite for the hotseat of chairman of the Telecom Regulatory Authority of India (TRAI), he is one of over seventy-five contenders who reportedly include Information and Broadcasting secretary Bimal Julka.

     

    Erstwhile chairman Rahul Khullar had taken charge of the regulatory body on 14 May 2012, and demitted office earlier this month on 13 May.

     

    TRAI had been established under an Act of Parliament to deal with telecom issues, but was given additional charge of broadcasting just over a decade earlier. Even though it appears to have handled broadcasting issues with fair competence, the bent of mind of the officials in the regulator is still towards telecom.

     

    Convergence: A delicate balancing act

     

    The task for the seventh chairman of TRAI becomes even more onerous: he has to ensure smooth coordination with two Ministries. Even though TRAI technically falls under the Communication and Information Technology Ministry, it has to also work at tandem with the Information and Broadcasting Ministry. 

     

    This balance between the two Ministries becomes crucial, considering that the National Democratic Alliance (NDA) Government is again talking about convergence at a time when two of the primary players who were involved on this issue a decade earlier when the matter had come up – to utter failure – are still in the cabinet. Arun Jaitley then headed Law and now heads the Finance and I&B Ministries, whereas Sushma Swaraj, who was then in charge of I&B Minister is now in External Affairs. In that round, the late Pramod Mahajan as Communications Minister was also part of the Group of Ministers headed by then Finance Minister Yashwant Sinha.

     

    The fact remains that convergence is bound to become a hotly debated subject during the tenure of the new chairman, and a lot of diplomacy will be required to balance the demands of the two ministries.

     

    Digital India and Broadband

     

    Even as a lot has been heard about programmes on Digital India and Make in India with little tangible showing so far in telecom and broadcasting, one of the greatest challenges the new incumbent will have to face is ensuring the growth of broadband.

     

    At present, India is at the 89th position in Network Readiness Index with countries like Singapore, Finland and Sweden having become leaders and by TRAI’s own admission the broadband connectivity is abysmally low with just 99.2 million subscribers by March this year. 

     

    In view of this, the government’s ambitious national broadband plan to connect as many as 2.5 lakh villages through optic fibre appears to be too far-fetched and even came in for sharp criticism from outgoing chairman Khullar, who termed the move as “impossible” to implement and something that is bound to “fail.” In fact, he said a plan to connect the entire country at one go is not the right way of providing broadband connectivity to all.

     

    Broadcasting Sector

     

    Expectedly, TRAI will need to not only strengthen its broadcasting team but also ensure greater coordination among officers in both broadcasting and telecom. This is also obvious from the number of policy decisions with regard to broadcasting, which have been taken to the Telecom Disputes Settlement and Addressable System and the Courts.

     

    The primary challenge that TRAI faces in broadcasting is to establish its credibility of being impartial and not playing into the hands of the broadcasting lobby. The cable operators and independent multi-system operators have been crying hoarse over this issue, often leading to litigation.

     

    In fact, the regulator has had to backtrack several times in the recent past, either on its own or because of Telecom Disputes Settlement and Appellate Tribunal (TDSAT) and court decisions and hopes the Supreme Court will come to its aid.

     

    A day after Khullar laid down office, TRAI on 13 May announced that amendments to its tariff orders issued on 1 October, 2004 and 21 July, 2010, which had been set aside by TDSAT earlier this month would be subject to the outcome of the appeal filed by the regulator before the Supreme Court.

     

    The two amendments made by the TRAI to its tariff orders that aimed at preventing broadcasters from giving their channels directly to the subscribers and putting commercial subscriber at par with ordinary subscribers were struck down by TDSAT on 9 March.

     

    TDSAT said TRAI must now undertake a fresh exercise ‘on a completely clean slate. It must put aside the earlier debates on the basis of which it has been making amendments in the three principal tariff orders none of which has so far passed judicial scrutiny. It must consider afresh the question whether commercial subscribers should be treated equally as home viewers for the purpose of broadcasting services tariff or there needs to be a different and separate tariff system for commercial subscribers or some parts of that larger body. It is hoped and expected that TRAI will issue fresh tariff orders within six months from to-day.’

     

    On 16 May, TRAI failed to get a stay from the Supreme Court of the order of TDSAT setting aside the amendments in two tariff orders, which had sought to put an inflation-linked hike of 27.5 per cent on addressable and non-addressable systems.

     

    The regulator also failed to get permission to take action against television channels violating its diktat of a total of 12 minutes of commercial and promotional advertisements every hour, though all broadcasters were asked to keep records of this by the Delhi High Court.

     

    Despite announcements, there has been little progress in the Make in India campaign as far as indigenous set top boxes for digital addressable systems go and most consumers have to put up with Chinese or other boxes.

     

    Similarly, analogue transmission continues in many parts of the cities and towns that have gone digital and the Government failed to get the stay of Digital Addressable Systems (DAS) in Chennai vacated.

     

    The subscription charges for the average consumer under DAS still continues to create confusion as far as free to air and pay channels go and that is the primary reason for the LCO’s inability to do proper billing – giving a reason for the broadcaster to complain.

     

    The Direct-to-Home (DTH) sector also complains about the fee charged by the Ministry, which they say makes it difficult for them to continue or earn profits.

     

    Both Internet Protocol TV (IPTV) and headend-in-the-sky (HITS) are still considered nascent technologies despite having been around for some years, and TRAI will have to find ways to encourage their growth, particularly in the face of smartphones which can receive live TV signals for which they often pay nothing.

     

    While the nation is talking about digital technology, Prasar Bharati feels that Frequency Modulation, which is an analogue technology, should be promoted until the nation is read for digital radio sets. This seems to militate against the crores of rupees spent by All India Radio (AIR) in Digital Radio Mondiale technology. Though TRAI has not interfered as it is a matter between the I&B Ministry and the public service broadcaster, it may have to do so if digitization has to succeed.

     

    Both the Government and TRAI have been announcing that e-auctions of the first batch of Phase III FM would begin in May but the month is almost at an end and no date has been fixed yet.

     

    Telecom Sector

     

    The new chairman would be taking charge at a time when the telecom sector is facing major turmoil with the emergence of over-the-top (OTT) operators. While the broadcasting community appears to be happy as the communication OTT will help popularize its programmes, the cellular operators feel OTT will affect their revenues adversely. The TRAI consultation paper also touched upon net neutrality, which is bound to gain controversy in the era of convergence.

     

    If the successor is Sharma, then his task will become even more challenging as it is bound to militate against the post he has been holding until now and where he had in fact set up a committee on the same subject even as a Parliamentary Committee is also considering this issue.

     

    Spectrum and the inability of the government to auction the entire spectrum available in the last e-auction – with 12 per cent remaining unsold – is bound to trouble the regulator. Added to that is the fact that despite the fact that the last e-auction was held in the tenure of the present government, Minister Prasad recently assuring the industry that the auction of spectrum in the future too would be conducted in a timely, fair and transparent way.

     

    Even as 3G is still to become a success, the regulator has been asked to look at 4G at a time when many telecom service providers are facing problems.

     

    Other challenges in telecom include extending the mobile network to rural India, and a debate whether India is ready for Virtual Network Operators.

     

    Clearly, the new chairman has to burn the midnight oil and at the same time avoid heartburn as he goes about his task of resolving the multifarious tasks before him.

  • TRAI to wait for final SC verdict before implementing tariff orders for C&S

    TRAI to wait for final SC verdict before implementing tariff orders for C&S

    NEW DELHI: The Telecom Regulatory Authority of India (TRAI) has said that amendments to its tariff orders issued on 1 October, 2004 and 21 July, 2010, which had been set aside by the Telecom Disputes Settlement and Arbitration Tribunal (TDSAT) earlier this month, would be subject to the outcome of the appeal filed by the regulator before the Supreme Court.

     

    The two amendments made by the TRAI to its tariff orders that aimed at preventing broadcasters from giving their channels directly to subscribers and putting commercial subscribers at par with ordinary subscribers were struck down by TDSAT on 9 March.

     

    TDSAT chairman Aftab Alam and member Kuldip Singh said the two amendments were “quite unsustainable and we are thus constrained to set aside the impugned amendment orders.”

     

    The amendments referred to the Telecommunication (Broadcasting and Cable) Services (Second) Tariff (Twelfth Amendment) Order 2014 dated 16 July, 2014 and the Telecommunications (Broadcasting and Cable) Services (Fourth) (Addressable Systems) Tariff (Fourth Amendment) Order 2014 dated 18 July, 2014 by which similar amendments were made in the Telecommunication (Broadcasting and Cable) Services(Second) Tariff Order 2004 dated 1 October, 2004 (relating to non-addressable or analogue systems) and the Telecommunication (Broadcasting and Cable) Services (Fourth) (Addressable Systems) Tariff Order 2010 dated 21 July, 2010 (relating to addressable systems) respectively.

     

    The Indian Broadcasting Foundation (IBF) and the Federation of Hotels and Restaurant Association of India had challenged the amendments as the commercial subscriber had been put at par with the ordinary subscriber and the tariff orders treat as equal groups of subscribers that are inherently unequal and are also so recognized in their different definitions in the tariff orders.

     

    In a press note today, TRAI said it had filed an appeal before the apex court and decided to hold its orders in abeyance ‘after duly considering the matter.’

     

    TRAI had issued the tariff orders – “The Telecommunication (Broadcasting and Cable) Services (Second) Tariff (Seventh Amendment) Order 2006″ dated21 November, 2006and the Telecommunication (Broadcasting and Cable) Services (Third) (CAS areas) Tariff (First Amendment) Order2006” dated 21 November applicable to commercial cable subscribers in the non-addressablesystem (non-CAS) and the CAS systems, respectively.

     

    Following an appeal, the Supreme Court had on 16 April, 2014 directed TRAI to look into the matter de-novo and within three months re-determine the tariff after hearing all the stakeholders’ contentions.

     

    The orders set aside by TDSAT on 9 March were the result of this re-examination.