AIDCF urges TRAI to pause NTO 2.0 implementation following price hike by broadcasters

In a letter, the MSO body asked TRAI to put a cap on channel prices for the overall benefit of the consumers as the rise in driver channel prices has defeated the purpose of NTO 2.0 regime

e4m by Javed Farooqui
Updated: Nov 8, 2021 9:23 AM  | 5 min read
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The All India Digital Cable Federation (AIDCF) has urged the Telecom Regulatory Authority of India (TRAI) to keep the implementation of New Tariff Order (NTO) 2.0 in abeyance following the decision by major broadcasters like Star, Zee, Sony and Viacom18 to increase the MRP of their popular channels and keep them out of bouquets, a move which is likely to result in inflation of consumer bills.

In a letter to the TRAI, the AIDCF has asked the regulator to revisit and relook into the provisions of the NTO 2.0 vis-à-vis the sustainability aspect of the implementation of this framework in light of the publication of the Reference Interconnect Offers (RIOs) by the broadcasters.

The AIDCF members represent more than 60% of the market share in the Cable TV Industry in India. There are an estimated 100 million cable TV homes in the country.

The apex body of Multi System Operators (MSOs) has also requested the TRAI to put a cap on channel prices for the overall benefit of the consumers as the rise in driver channel prices by broadcasters has defeated the purpose of NTO 2.0 regime.

It also noted that the High Court of Bombay vide its order dated 30.06.2021 in NTO 2.0 matter had observed that the interest, welfare, and well-being of the consumers should be given pivotal importance in the process of implementing a regulatory regime.

Further, the AIDCF has requested the TRAI to immediate take steps for creation of regulatory framework for the OTT platforms & applications for distribution of content besides issuing instructions to broadcasters to restrict distribution of “pay” channels on DD Free Dish.

The AIDCF also said that the TRAI needs to ensure implementation of the regulatory regime amongst all the Distribution Platform Operators (DPOs), on a non-discriminatory basis and without any exception. It also told the TRAI to ensure that the RIOs that are published by the broadcasters are in conformity with the spirit of the provisions of the regulatory framework.

On the RIOs published by the broadcasters, the AIDCF said that a plain reading of the RIOs published by the broadcasters reveal that almost all of them have increased prices of their driver channel exponentially by 30% to 60%, thereby resulting in the exclusion of such channels from the bouquets.

The letter stated that the MRP of driver channels of premiere broadcasters have exponentially increased between 200¬400% in a period of around two years of time, from 2019 to 2021. “While the MRPs of such channels were already increased between 150-200% during the implementation of New Telecom Regulatory Framework/ the Principal Regulations in 2019; the prices have yet again been increased by the broadcasters by further 20-30% in 2021 which has led to the consumers to shell out over approximately 200% -400% of additional costs on the MRPs of the premiere channels since 2019,” the letter reads.

The AIDCF noted that the new pricing declared by the broadcasters will lead to a further erosion of the pay-TV subscriber base, which was also been evident during the implementation of the New Regulatory Framework of 2019. The recent RIOs and channel prices issued by broadcasters have defeated the main  purpose of NTO 2.0 regulatory framework envisaged by TRAI i.e., to reduce television bills of the subscribers, however it is proving exactly the opposite, it added.

According to the AIDCF, the increase in driver channel prices will increase the monthly cost of subscribers by Rs. 80/- to Rs. 100/- as the premiere channels have been kept outside the purview of the  broadcasters' formed bouquets and in the event, the subscribers still want to have access to all such premiere channels, they will have to shell out more money for being able to enjoy the same services.

In order to buttress its point, the federation stated that a consumer is paying an amount of Rs 141 towards the price of the base Hindi bouquets of Star India, Sony Pictures Networks India (SPNI), Viacom18 and ZEEL. Whereas, with effect from 01.12.2021, any subscriber who wishes to maintain the status quo and enjoy similar cable television services will have to pay an amount of Rs 203.80 instead of Rs 141 towards the MRP of channels and bouquets of pay channels.

In the NTO 1.0 regime, a consumer is paying Rs 271 per month for the bouquets of four broadcasters, plus Rs 130 towards the Network Capacity Fee (NCF). However, the same consumers will now have to fork out a cumulative amount of Rs 333.80 (MRP of channels and bouquets of pay channels + NCF of Rs 130).

The AIDCF also noted that Cable TV Industry has been continuously losing subscribers for the last six quarters. Major cable TV companies have lost 10% to 15% subscribers every quarter as customers are shifting to OTT platforms or towards Free Dish.

“On the one hand, the DPOs are reeling under high regulatory tariff structure, wherein their purchases cost is also fixed, and their selling price is also fixed, leaving them with a fixed margin of 5% to 8% and on the other hand, no regulation on the OTT applications is proving to be disastrous for the industry,” the AIDCF averred.

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