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Excessive regulation has brought DTH industry to its knees: Gopal Vittal

The MD & CEO of Bharti Airtel was referring to the New Tariff Order established by the TRAI, which he said, has not benefited any stakeholder

e4m by Javed Farooqui
Published: May 23, 2022 8:16 AM  | 3 min read
vittal

Bharti Airtel MD & CEO Gopal Vittal has alleged that “excessive regulation” by the Telecom Regulatory Authority of India (TRAI) has brought the direct-to-home (DTH) sector to its knees. Vittal was referring to the New Tariff Order (NTO) established by the TRAI, which he said, has not benefited any stakeholder.

"The DTH business continued to see headwinds. While the category continues to see a significant long-term opportunity for upgradation from cable, it’s also a classic case of an industry that has been brought to its knees, due to excessive regulation," Vittal said during the company's Q4 FY22 earnings conference call.

He went on to explain how the NTO has increased complexity for the pay-TV industry which was under forbearance as far as pricing is concerned. "The new tariff order brought about by TRAI a few years ago mandated every minuscule aspect of pricing in an industry, which was managed until then very simply through forbearance. This created a mind-boggling amount of complexity for the DTH players and even more importantly for the customer with no benefit to any stakeholder," he elaborated.

Vittal stated that the TRAI regulation is skewed since the price of the same content is regulated on traditional platforms and unregulated on over-the-top (OTT) platforms. He also pointed out that some amount of premium content is being made available by broadcasters on their free-to-air (FTA) offerings.

"The second aspect of skewed regulation is to do with the very same content being made available for free. This is what happens on free-to-air channels and there might be very good content in many cases here with just windowing or it’s being available — being made available on the same screen through a broadband pipe at unregulated prices. This is what happens on OTT platforms. As a result, the DTH industry has been crippled," the Bharti Airtel chief stated.

The TRAI has come out with a consultation paper on broadcast tariffs to reconsider some of its recommendations that are part of NTO 2.0. "We are glad to see that TRAI has just come out with the new consultation paper on tariffs, and we hope that at the end of this consultation, regulations will be lightened so that we can focus on what we do best, keep things simple and serve customers," he said.

Bharti Airtel's direct to home (DTH) segment has seen slower revenue growth in FY22 due to a declining subscriber base. Airtel Digital TV, the DTH brand of Bharti Airtel, has posted a 3% growth in revenue at Rs 3153.8 crore in FY22 compared to Rs 3056.2 crore in FY21.

The company's subscriber base declined by 0.9% to 17.56 million in FY22 compared to 17.72 million in FY21. Average Revenue Per User (APRU) was down 1.5% to Rs 142 from Rs 144 in the prior fiscal. The monthly churn rate came down to 2.1% in March 2022 against 2.2% in March 2021.

On the broadband business, Vittal said that this category has the potential to reach 40 million homes by 2025. "In our broadband business, we continued to see strong sequential revenue growth, driven by continued strong customer additions. Our rollout is gathering pace and we clocked 1.85 million new home passes this quarter. Our innovation through the digital local cable operator partnership model has now enabled us to be present in 847 cities, an addition of 175 cities in this quarter. We believe that this category will grow to over 40 million homes by 2025, and we are well poised to gain a very significant share of this growth."

 

 

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