ITV

Tag: NCF

  • Airtel Digital TV operating revenue up as bottom line dips for first quarter

    Airtel Digital TV operating revenue up as bottom line dips for first quarter

    BENGALURU: The digital TV services segment from Sunil Mittal’s Bharti Airtel Ltd (Airtel), Airtel Digital TV, which provides direct to home (DTH) satellite television services, reported growth of 0.8 percent in operating revenue at Rs 744.8 crore for the quarter ended 30 June 2020 (Q1 2020, quarter or period under review) as compared to Rs 738.9 crore for the corresponding quarter of the previous year Q1 2019 (y-o-y). However, this is not a true oranges-oranges comparison, since as of 1 March 2020, Airtel Digital TV services has implemented new guidelines of NCF (Network Carriage Fees) under the new tariff order (NTO) from Telecom Regulatory Authority of India (TRAI). The company says in a media release that Airtel Digital TV revenue witnessed a growth of 9.3 percent y-o-y on an underlying basis, on the back of strong customer additions.

    Airtel Digital TV operating profit for the quarter under review declined 23.5 percent to Rs 276.2 crore (37.1 percent of operating revenue) as compared to Rs 361.2 crore (48.9 percent of operating revenue) for Q1 2020. Airtel reported 1.3 percent growth in Assets to Rs 3,462 crore for Q1 2021 from Rs 3,417.4 crore in Q1 2020. However, Assets in Q1 2021 were 12.9 percent lower than the Rs 3,794.9 crore in the immediate trailing quarter (Q4 2020). The segment’s liabilities for Q1 2021 grew 11.6 percent to Rs 4000.5 crore from Rs 3,585.2 crore in Q1 2020. Liabilities in the quarter under review were however 3 percent lower than the Rs 4,122.4 crore in the immediate trailing quarter Q4 2020.

    The company reported a 5.1 percent y-o-y increase in net DTH subscribers in Q1 2021 at 1.68 crore as compared to 1.6 crore in the corresponding quarter of the previous year.

    Bharti Airtel’s consolidated revenue for Q1 2021 grew 15.4 percent on an underlying basis to Rs 23,939 crore as compared to the year ago quarter. Consolidated EBIDTA for the quarter under review was Rs 10,639 crore (44.4 percent margin). India revenue at Rs 17,589 crore were up 14.6 percent and up 15.1 percent on an underlying basis y-o-y.

    An earnings media release for Q1 2021 quotes Airtel MD and CEO, India & South Asia Gopal Vittal: “We are going through an unprecedented crisis caused by COVID. Despite this, our teams have served the country well and kept our customers connected. Data traffic growth surged by ~73 percent y-o-y even as 4G net additions slowed down to 2 Million caused by supply chain shocks in the device ecosystem. Revenues grew by 15% Y-o-Y and performance was satisfactory across all segments. Our flagship “War on Waste” program, helped improve EBITDA margin by 1.6 percent over the previous quarter. To serve our customers even better, we have launched a company-wide program to improve our customer experience. We continue to invest in the best of emerging technologies to make our networks future ready. We have made rapid strides in our digital business, with nearly 155 million monthly active users across Airtel Thanks, Wynk, Xstream and our payments platforms. Today, 60 percent of Airtel’s entire business goes through its digital channels. We are most excited about the string of partners we are attracting in order to build greater stickiness and ultimately growth from our digital assets.”

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  • Tata Sky seeks to amend its writ petition against TRAI in the tariff order case

    Tata Sky seeks to amend its writ petition against TRAI in the tariff order case

    MUMBAI: The direct-to-home (DTH) platform Tata Sky has sought to amend the writ petition which was filed earlier before the Delhi High Court against the new tariff order introduced by The Telecom Regulatory Authority of India (TRAI). Alongside the ongoing case, Tata Sky seeks to amend the present petition by adding a challenge to the new amendments which was brought by the regulatory body at the beginning of 2020.

    Tata Sky has mentioned that following amendments are “arbitrary, irrational, unreasonable, without jurisdiction and seek to be expropriatory”.

    The petitioner has submitted that the reduction of Network Capacity Fee (NCF) is irrational and unreasonable as it does not ensure reasonable profit to the DTH platform. According to the petitioner, the TRAI has not carried out any tariff determining exercise before making the amendment regarding NCF.

    TRAI has also reduced the chargeability of the NCF in respect of every additional television to only 40 per cent of the original NCF, in a "multi-tv household".  It has also asked to reduce the carriage fee chargeable by a DPO against a new television channel from 20 paisa for Standard Definition (SO) per channel per month for a penetration upto 5 per cent, to a cap of maximum Rs 4 lakh for SD Channels. Such caps are also prescribed for HD Channels.

    “Through the capping of the Price of a Pay-Channel which could be put into a bouquet, the Distribution Fees available to the DPO has also been unreasonably and irrationally reduced,” the petitioner submitted.  It also added that the amendment would reduce  the  capability  of  a  DPO  to  form  bouquets  of channels which are priced above Rs 12 by the broadcaster. Moreover, a compulsory free carriage of Doordarshan channels has also been mentioned as unreasonable.

    “The Petitioner submits that the Impugned Amendments 2020 reduce the revenue generated by the Petitioner No.1 in such manner that even the basic right of the Petitioner to recover the basic cost of its network has been negated. The Petitioner submits that during the course of the present petition before this Hon'ble Court, the Respondent has failed to prove, establish or even display the advantages of the 2017 Regime,” it says.  

    Hence, Tata sky has sought to make additional grounds which may be allowed to be included in the main writ petition. According to the company, the impugned amendments 2020 do not take into account relevant matters and takes into account irrelevant issues like foreign consumers to subscribe television channels on the ala-carte basis by making bouquet of channels expensive. The DTH network is thus being made available to the consumer in such manner that it would not be able to even recover its operational or capital costs.

  • Bombay High Court reserves judgement in new tariff order amendment case

    Bombay High Court reserves judgement in new tariff order amendment case

    MUMBAI: The Bombay High Court has reserved the judgment in the case of the new tariff order amendments (NTO 2.0) as the hearing got over on Thursday. While the ambiguity still continues in the ecosystem, the court is expected to pronounce the judgment in a couple of days.

    According to sources close to the development, Telecom regulatory Authority of India (TRAI) cited the judgment by Justice Nariman of Supreme Court delivered in 2018 and judgment of Delhi HC from 2007 to support that it has full right to regulate broadcasters. It alleged that regulating bouquet formation and discounts is important because broadcasters use the same to push unwanted channels to consumers and are only interested in increasing their advertisement revenue.

    On the other hand, broadcasters argued that bouquets help to make large number of channels cheaper for consumers and also attempted to prove that due to competition from streaming services and telcos, regulation for broadcast TV ought to be reduced. As LCOs filed an independent writ petition asking for stay, they also argued that any attempt by TRAI to bring down NCF will kill their business.

    Meanwhile, Kerela HC hearing a matter from MSOs protesting against an effort to reduce NCF has also reserved its order and will pronounce it soon.

    As none of the high courts pronounced any clear order on interim relief, the amended regime came into play from 1 March. Among the DPOs, Tata Sky, Airtel, Dish TV, Siti Cable and IMCL have implemented NTO 2.0 and reduced their NCF.

  • Bombay HC to hear petitions against TRAI order

    Bombay HC to hear petitions against TRAI order

    MUMBAI: The Bombay High Court will hear on 26 February a petition filed by the Digital Cable Operators Association of Mumbai (DCOAM) and Maharashtra Cable Operations Foundation (MCOF), challenging the 'arbitrary' rules introduced by the TRAI.

    They challenged before the High Court the network capacity fee (NCF) implemented by TRAI under the NTO-2 regime. The operators’ main contention was with regard to the NCF cap of Rs 160/month fixed by TRAI and additional TV connections and discounts. The petitioners claimed that the NTO would hinder their basic right to do business.

    The court has set aside the matter for hearing for Wednesday.

    Adv Rahul Soman, who appeared for the operators, contended that the TRAI has not fixed an upper limit for extra channels. So, the situation is such that customers can demand any number of channels, which will hamper the cable operators’ business, argued the lawyer.

    A lot of stakeholders, in addition to some individuals, have moved various high courts in the country, challenging the TRAI’s new price regime. They include various broadcasters and bodies like the Indian Broadcasting Foundation (IBF).

    Early this year, TRAI stipulated 200 channels for a NCF of Rs 160. The regulator has also directed the DPOs not to charge more than the stipulated monthly charge of Rs 160 for providing all the available channels.  

  • India Ratings: NTO 2.0 negative for broadcasters, neutral for MSOs

    India Ratings: NTO 2.0 negative for broadcasters, neutral for MSOs

    MUMBAI: Credit rating agency India Ratings (Ind-Ra) & Research believes that Telecom Regulatory Authority of India’s (TRAI) amendments to the tariff and interconnection regulation are largely negative for broadcasters and neutral for multiple system operators (MSOs).

    The rating agency, a subsidiary of the Fitch Group, said that the amendments (NTO 2.0) have focused on a reduction in the final customer price, resulting in broadcasters bearing the largest burden in the entire value chain.

    Ind-Ra in its report said that the revised regulations stipulate a reduction in a-la-carte pricing for channels and a cap on bouquet prices in line with a-la-carte prices would impact broadcasters’ profitability meaningfully.

    The regulatory had put a cap on network capacity fees (NCF) & carriage fees and a higher number of pay channels in base NCF, which sound optically negative for MSOs, but would have a marginal impact as they are broadly in line with the current on-the-ground ecosystem, said the report.

    Meanwhile, the reintroduction of discount on bouquet prices compared to a-la-carte channel prices is surprising, given that the Madras High Court had earlier ruled against it.

    The amendment directs broadcasters and distributors to submit the revised channel prices by 15 January 2020 and 30 January 2020 respectively, with full implementation from 1 March 2020.

    Ind-Ra also believes that the regulation has essentially de-risked the business model of distributors (MSOs, local cable operators (LCOs)), as their revenue stream will contain fixed NCF from subscribers and content commission from broadcasters, thereby effectively passing through content costs.

    The increase in the total number of channels under the base NCF to 200 from 100 earlier is unlikely to have any major impact, as MSOs anyways offer above 200 channels under the current price regime for NCF of INR130.

    The rating agency also added that the exclusion of mandatory channels as per the government from the bouquet of 200 channels may free-up space for additional pay channels, which may further reduce NCF for MSOs.

    MSOs earn content fees and distribution fees from broadcasters as a proportion of the content cost. MSOs’ realisations may slightly be impacted as the overall content costs and resultant content & distribution fees have also reduced.

    As the continued investment in content remains critical for broadcasters, the revised regulation capping prices of both a-la-carte channel and channel bouquet may curtail broadcasters’ ability to invest in quality content, said the Ind-Ra report.

    According to the rating agency, the risk is even higher for the sports genre, where content creation/acquisition costs can be more than in the news genre. Also, the regulation on channel prices discourages bundling weaker channels with strong anchor channels in the same bouquet.

  • Sun Direct offers 155 channels for Rs 130 network capacity fee

    Sun Direct offers 155 channels for Rs 130 network capacity fee

    MUMBAI: DTH operator Sun Direct is now allowing subscribers to select up to 155 channels for a monthly network capacity fee of Rs 130/- plus applicable taxes.

    Sun Direct is the first DTH to officially declare NCF allowing more than 100 channels along with the removal of the additional slab. The operator has been offering almost the entire FTA channels bouquet available on its platform on complementary basis with the Rs 130 NCF base pack from the start of the new tariff order.

    While most operators have declared Rs 130 as NCF for 100 channels, most of them have been offering hundreds of FTA channels on a complimentary basis with discounted NCF on bundle packs.

    The DTH operator had on 24 January declared its network capacity fee days ahead of the switch over to the new tariff order. The network capacity fee payable monthly back then was set at Rs 130/- plus applicable taxes for 100 SD channels. Additional slab NCF was set at Rs 20/- plus applicable taxes for the next 25 SD channels.

  • DTH players eliminate network capacity fees on FTA channels

    DTH players eliminate network capacity fees on FTA channels

    MUMBAI: Major DTH players like Tata Sky, Dish TV and Sun Direct have removed the Network Capacity Fee (NCF) on free-to-air (FTA) channels above the required 100 channels, according to a report by Telecom Talk.

    Under TRAI’s new broadcast regulatory regime, the cable TV bill of users now has two components, the network capacity fee (NCF), which is Rs 130 for hundred channels and the cost of any paid channels or paid bouquets.

    Dish TV subscribers will be able to pick as many as 189 FTA channels, without paying any additional NCF — over and above the base pack charges of Rs 130 per month (excluding taxes). However, it hasn’t changed anything for the paid SD and HD channels.

    The operator now allows its subscribers to pick a range of FTA channels, without paying any additional NCF and has categorised all the available FTA channels into different packs, namely BST North with 189 channels, BST Hindi with 99 channels, BST Marathi and Gujarati with 84 channels, BST Bangla Odia with 83 channels, and BST DD Pack with 25 channels.

    Sun Direct’s website says it is offering a total of 140 channels in the back pack of Rs 130 + 18 per cent GST. The base pack also includes the 25 Doordarshan channels, which are mandatory for all cable/DTH operators to provide.

    Tata Sky is providing a limited number of channels for free beyond the designated 100.

    As per the latest framework by the Telecom and Regulatory Authority of India (TRAI), customers need to pay Rs 130 to get the first 100 FTA channels. An additional network fee of Rs 20 per month is also being charged for every block of 25 paid channels.

  • Distributors cannot charge more than Rs 130 per month for 100 SD channels: TRAI order

    MUMBAI: Consumers will now be able to receive 100 standard definition channels at Rs 130 a month plus taxes, according to the new TRAI tariff order issued last Friday. This will ensure reasonable rate of return to the DPOs on investments in the existing distribution networks as well as incentivise them for additional investment to ensure better network quality for providing value added services and broadband to subscribers. It is hoped that new framework will bring transparency, level playing field, encourage consumer choice and growth of the sector.

    The regulator stated that no separate charges other than this Network Capacity Fee (NCF) would be paid by the subscribers for opting Free-to-Air channels or bouquet of Free-to-Air channels.

    In order to provide choice to the subscribers and to curb skewed prices of a-la-carte channels as compared to bouquets, the Authority has mandated that a broadcaster can offer a maximum discount of 15 per cent while offering its bouquet of pay channels over the sum of MRPs of all the of pay channels in that bouquet. The restriction of maximum discount of 15 per cent on formation of bouquet is to ensure that a subscriber is not forced to take a channel which he doesn’t want. Forcing of non-driver channels to subscribers not only reduces choice of subscribers but also eats away bandwidth of distributors of television channels restricting entry of new and more competitive channels.

    Digtal addressable television distribution platforms, TRAI stated, are envisaged to provide several benefits to consumers of broadcasting services including better quality of signals, choice of channels, availability of multimedia services etc. With the completion of first three phases of digitization to a large extent, though the addressability, capacity and quality of signal have improved, issues relatéd to consumer choice, transparency and non-discrimination.

    Broadcasters want freedom to price their channels. Their contention is that since pricing at retail level is with distributors of television channels, the flexibility to maximise the revenue through advertisement and subscription fee has been compromised. News broadcasters, who primarily provide free-to- air (FTA) channels and have advertisements as only source of revenue, claim that many a time their channels at retail level are priced in such a manner that even pay channels are cheaper than their FTA channels. In the present framework distributors of television channels feel that they are totally dependent on effective negotiations with broadcasters for monetisation of their investment and due to non-transparency in the system, they end up at a loss while bargaining with the broadcasters.

    According to TRAI, subscribers feel that the pricing of channels is skewed resulting effectively in no choice of individual channels. They feel lack of transparency. Questions are raised time and again as to why same channel is priced so differently by different distribution platform operators.

    While prescribing the new regulatory framework, the TRAI has kept in mind the discussions in the Parliament on the motion for consideration of the Cable Television Networks (Regulation) Amendment Bill, 20 11, wherein the then Minister of Information and Broadcasting stated that TRAI would establish a system wherein consumers would be free to choose a-la- carte channels of choice and they would not be required to subscribe to bouquets.

    While framing this Tariff Order, the emphasis of the Authority has been to ensure transparency, non-discrimination, consumer protection and create an enabling environment for orderly growth of the sector. The new framework attempts to address all the issues raised by broadcasters, distributors of television channels and subscribers. The broadcasters will have to declare their channels as ‘Pay’ or Tree-to-Air’ (FTA). Broadcasters have been given complete flexibility to declare maximum retail price (MRP) of their pay channels to subscribers with no restrictions as long as such channels are provided to consumers individually. However, if a pay channel is provided as part of a bouquet, MRP of such pay channel cannot be more than Rs. 19/-. This is to ensure protection of interests of consumers as bouquet deals are oblique to individual channel prices. The new framework in no way restricts or curtails the freedom of broadcasters to price their channels. Provisions have also been made to ensure that no additional charges are levied for subscribing to FTA channels.

    The salient features of the Tariff Order are:

    • Broadcasters to declare maximum retail price (MRP) (excluding taxes) ), per month, of their a-la-carte pay channels for subscribers.
    • A broadcaster can also offer bouquets of its pay channels and declare MRP (excluding taxes) of bouquets for subscribers. However, MRP of such bouquets of pay channels will not be less than 85% of the sum of maximum retail price of the a-la-carte pay channels forming part of that bouquet.
    • Separate bouquet for pay channels and free-to-air channels.
    • Charges payable by a subscriber for distribution network capacity and channels have been separated.
    • The distribution network capacity required for initial one hundred Standard Definition (SD) channels can be availed by a subscriber by paying an amount, not exceeding, Rs. 130/- (excluding taxes) per month to the distributor of TV channels.
    • Within the capacity of 100 SD channels, apart from the channels to be mandatorily provided to subscribers as notified by the Central Government, a subscriber will be free to choose any free-to-air channel, pay channel, or bouquet of pay channels offered by the broadcasters or bouquet of pay channels offered by the distributor of television channels or bouquet of free-to-air channels offered by the distributor of television channels or a combination thereof.
    • No separate charges, other than the Network Capacity Fee, to be paid by the subscribers for subscribing to free-to-air channels or bouquet of free-to-air channels.
    • The additional capacity, beyond initial one hundred channels capacity, can be availed by a subscriber in the slabs of 25 SD channels each, by  paying an amount not exceeding Rs. 20/- per such slab, excluding taxes, per month.
    • Every distributor of television channels shall offer all channels available on its network to all subscribers on a-la-carte basis.
    • Every distributor of television channels shall declare distributor retail price of each pay channel and bouquet of pay channels payable by a subscriber:
    • A subscriber can choose a-la-carte channels of its choice.
    • Distributors of television channels are permitted to. form bouquets from a-la-carte pay channels and bouquet of pay channels of broadcasters. However, distributor retail price of such bouquets of pay channels shall not be less than 85 per cent of the sum of distributor retail prices of the a-la-carte pay channels and bouquets of pay channels of broadcasters forming part of that bouquet.
    • A subscriber has to pay separate charges, other than the Network Capacity Fee, for subscribing to pay channels or bouquet of pay channels.
    • Distributors of television channels have to offer at least one bouquet, referred to as basic service tier, of 100 free-to-air channels including all the mandatorily channels to be provided to the subscribers as notified by the Central Government. This bouquet will be one of the options available for subscription to customers. It will be the subscriber Who will be free to exercise his option.
    • Any pay channel having a-la-carte MRP of more than Rs 19/- per month (Excluding Taxes) shall not form part of any bouquet.

    Also Read:

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    TRAI gets support from Subhash Chandra on inter-connect guidelines

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