The Telecom Regulatory Authority of India (TRAI) has allowed cable operators and Multi System Operators to raise the tariff by an additional 4 per cent over the ceiling cable charges to give effect to inflation adjustment from January 1, 2006. This is applicable to both Free to Air (FTA) and pay channels.
The new rate is in addition to the existing inflation adjustment of 7 per cent, notified on December 1, 2004. TRAI has frozen the ceiling of the cable rates, excluding taxes, prevailing as on December 26, 2003.
TRAI had indicated that the price regulation is intended to be temporary till such time as there is no effective competition and that the price regulation would be withdrawn as soon as there is evidence of effective competition in the cable market. With more DTH players joining the bandwagon with the presently functional Zee’s Dish TV and Doordarshan’s DD Direct, TRAI may have to relinquish intervening in the price structure in the cable industry sooner than later.
The total increase on account of the new inflation adjustment (taking into account both the prevalent 7 per cent adjustment and the proposed 4 per cent hike) would work out to 11.28 per cent (7 per cent + 4 per cent + 4 per cent on 7 per cent) when calculated with reference to ceiling cable charges (exclusive of taxes). That means if you are paying Rs 214 at present, from the New Year, you will have to pay Rs 222.56.
However, TRAI said that the actual extent of increase on account of inflation in absolute terms with reference to ceiling cable charges as on December 26, 2003 would vary from case to case, depending on the actual cable charges that prevailed as on the said date in respect to a consumer / cable operator / multi system operator.
TRAI also maintained that it had separately issued a consultation paper on certain issues relating to tariffs such as provision of channels as separate channels and not as a bouquet, pricing of channels launched after December 26, 2003, and pricing of channels that migrate from one distributor to another. “Decisions on these issues will be taken separately after the consultation process is over,” the telecom body said.