Stakeholders have contested TRAI’s draft tariff amendment order for tariff ceiling at Rs 77, exclusive of taxes, for Free to Air (FTA) channels in CAS areas and have demanded an increase in the tariff in view of the increase in raw materials, inflation, man power cost, etc.
“Most of the materials required for cable TV are manufactured out of metals like copper and aluminum whose prices have shot up significantly. Further, power and fuel are important components in delivery of the services, which have also risen sharply in the last 1-2 years. There are further inflationary pressures on the overheads front like salaries, administration, etc.,” cable TV services company Hathway pointed out.
Many stakeholders like held that the quality of service was not taken into account while deciding the price. “Quality of service was not considered while calculating the number of subscribers, which was based on extended network of the MSO prevailing at that time,” Cable Opearators Federation of India (COFI) held.
On the crucial pricing issue, however, stakeholders’ calculations varied from Rs 100 to Rs 180. “FTA price of Rs 72 + Rs 7.2 = Rs 79.2 is not only unrealistic but also initially it was wrongly calculated. The FTA price may be increased. It should be around not less than Rs 150 per month in order to facilitate the implementation of CAS,” Cable Operators United Front (COUF), Delhi said.
“If the upward and downward adjustment in cost for the above factors is taken into account, the cost of Rs 72 as prorated would give at least a minimum cost of Rs 100 (exclusive of taxes),” said Col V C Khare, a cable TV industry observer.
“With an annual inflation of around 5 per cent, the amount equivalent to this price at present value will be around Rs 180 per month. A price below this level will result in deficiency in quality of service for the consumers, non-conformity with the provisions of CAS,” NCTA’s Vikki Choudhury pointed out.
“In our view, a minimum of Rs 150 should be charged for the basic tier considering the fact that TRAI does not want last mile operators to pay for the FTA package to the MSOs. An amount of Rs 30 to Rs 50 is being paid at present to MSOs,” COFI held.
The Government had fixed a ceiling rate of Rs 72 per month per subscriber in 2003 for the basic service tier under the Cable Television Networks (Regulation) Act, 1995. TRAI had fixed a general ceiling on the charges payable by subscribers to cable operators, cable operators to multi system operators / broadcasters and multi system operators to broadcasters through out the country, both in respect of free-to-air and pay channels, at the levels prevalent as on December 26, 2003.
By a subsequent amendment to the Tariff Order dated December 1, 2004, TRAI allowed an increase of 7 per cent in order to make adjustments for inflation with effect from January 1, 2005. A subsequent increase of 4 per cent on account of inflation was allowed by TRAI by a tariff amendment order dated November 29, 2005 with effect from January 1, 2006, but this increase has been stayed by the Telecom Disputes Settlement and Appelate Tribunal (TDSAT).