TRAI directs Nimbus to adhere to channel pricing norm

TRAI directs Nimbus to adhere to channel pricing norm

Author | Pallavi Goorha | Friday, Jan 12,2007 9:51 AM

TRAI directs Nimbus to adhere to channel pricing norm

The Telecom Regulatory Authority of India (TRAI) has turned down Nimbus Sports’ plea to price its two sports channels – Neo Sports and Neo Sports Plus – above the stipulated price under the CAS regime. The regulator has directed Nimbus to reduce the price bouquet of its two sports channels from Rs 58.50 to the prevalent price of channels of the same genre. They have to adhere to the maximum price of Rs 5 per channel per subscriber per month in CAS areas.

Roop Sharma, President, COFI, said, “The implications of the TRAI direction is that Nimbus will have to reduce the price of the pay channels. No channel can disobey the TRAI order, even STAR had to comply with TRAI’s order.”

Nimbus Sports Broadcast in a letter dated September 27, 2006 had written to the TRAI stating it had priced both its sports channels at Rs 49.50 per month per channel, and if the two sports channels were offered as a bouquet, the price would be Rs 58.50.

This was objected to by the Cable Operators Federation of India (COFI) which lodged a complaint with TRAI, following which the regulator asked Nimbus to reply as to how it had arrived at the channel pricings and clarify how the proposed price of Rs 49.50 per channel per month would meet the requirements of the principal clause 3B of the Tariff order.

Nimbus replied in a letter dated October 30, 2006 that comparing the prices of Neo Sports and Neo Sports Plus with other sports channels, simplicitor would not be the right yardstick and stated that the proposed price of the two sports channels after December 31, 2006 in CAS areas would remain unchanged till at least December 31, 2007.

TRAI, however, turned down Nimbus Sports’ contention stating that it was in contravention of clause 3B of the principal tariff order due to following reasons: Clause 3B of the principal tariff order provides inter alia for factors of language and genre to be taken into account for establishing similarity of rates of similar channel. The said channels (Neo Sports and Neo Sports Plus) belong to the genre of sports channels and offered in English language.

Another factor was that the revenue potential of the channels could not be a relevant factor for determining the similarity between the channels when both the channels were of the same genre (that is sport channel) for the purposes of clause 3B of the principal tariff order; and whereas the ESPN and STAR Sports channels were channels similar to the said sports channels of Nimbus Sports Broadcast Pvt Ltd on the basis of genre and language.

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