MUMBAI / NEW DELHI: Finally, after a wait of around seven months after it was first notified and then re-notified on 3 March, the tariff order for digital addressable system has come into effect today – but implementation may take some time after overcoming some stumbling blocks.
Even as the petition filed by Star India and Vijay TV on the ground that the Telecom Regulatory Authority of India cannot regulate content which falls under the Copyright Act 1957 is pending hearing in Madras High Court, direct-to-home platforms are expected to pose a major challenge to its implementation.
Primarily, the problem occurs because all stakeholders will have to abide by the rates fixed by the broadcaster according to the new tariff order.
The DTH players are agitated not only with the fact that they pay over 85% of the service tax and entertainment tax in the digitised universe, but the fact that their liberty to make their own bouquets may be taken away with the broadcasters having the say in fixing rates for individual channels.
Tata Sky CEO Harit Nagpal has confirmed to indiantelevision.com that it is moving the Delhi High Court against TRAI on the tariff order. As it is one of the largest among the six private DTH operators, the approximately Rs 50-billion Tata Sky may be joined by other players.
Tata Sky had designed packages as per genre so as to make it smoother for the customer but may now have to change these bouquets/bundles as the new order directs the DTH operators to offer channels on an à la carte basis and then link them to the bouquet price.
There are several conditions in the new order as to how the channels could be priced in a bunch, and individually, Nagpal said. If one aspires that consumers are going to use an app and order a channel that may not take place in the Rs 58000-crore television industry.
Consumers in India would expect the salesperson to answer their specific queries before they subscribe. Nagpal said it costs Tata Sky around Rs 200 to successfully close one subscription as a call centre call costs Rs 7 a minute. Tata Sky’s margin is Rs 60,which is 20 per cent of Rs 300 — the average revenue from each subscriber. Tata Sky apprehends going out of business taking into consideration the cost of handling calls, and the lowly profits.
The platform which claims around 12.08 million active subscribers has explained all points in detail to TRAI, but to no avail. The new order has been notified, and it’s too complicated to enlist channel pricing on the website as expected, Nagpal said.
Nagpal said, ideally, the purpose of the government should be to achieve absolute digitisation and transparency by streamlining the ties between the MSOs and LCOs.
The cable operators have in so many years failed to offer tiered packages, even at the genre level. With the aim of making the category fully transparent, it needs to switch to prepaid so as to make sure the MSO acts similar to DTH operators that collect money in advance.
At the lowly margin of 20%, the Tata Sky executive said it was not encouraged to innovate in terms of providing Interactive services, HD, DVR and on-demand services, etc. He said the tariff order was not implementable, and this would be proved before the Delhi High Court in the case being filed this week.
The new carriage fee structure that has been proposed made channels serving smaller group or communities non-profitable. The Tata Sky CEO said he failed to comprehend why a channel would pay a fee to be carried on a platform.
Owing to its transparency and qualified processes, the company that is best equipped to implement the new TRAI order was Tata Sky, Nagpal believed, but added: “If Tata Sky is unable to implement it, none can.”
India is one of the cheapest market for cable television entertainment even when one compares it with similar per capita Asian nations such as the Philippines and Indonesia US$25 per month, whereas consumers in India pay around US$5-6.
TRAI had first come out with a draft tariff order in October 2016 but was embroiled in the case in Madras High Court which had initially directed status quo. Later, TRAI had issued the orders on 3 March after getting the green signal from the apex court even as the broadcasters’ case was pending in the High Court.
Apart from the Tariff order which had originally been issued on 10 October last year, the regulator also issued the DAS Interconnect Regulations which had been issued on 14 October last year, and the Standards of Quality of Service and Consumer Protection (Digital Addressable Systems) Regulations which had been issued on 10 October last year.
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