LCOs’ strike against TRAI tariff regulation: MSOs disagree

MSOs say cable operators do not want to put in efforts for convincing consumers to buy pay channels

e4m by Neethu Mohan
Updated: Jan 23, 2019 8:53 AM

The Telecom Regulatory Authority of India (TRAI) recently announced new tariff regulations where the cable TV and DTH consumers will have the freedom of opting for channels of their choice. The move has left conventional cable TV operators in South India unhappy and they have declared a strike against the new regulations on January 24. The operators are demanding a change in the tariff orders and reduction of GST from 18 per cent to 5 per cent.

The one-day strike will result in the blackout of TV screens across the South Indian states. However, it appears that MSOs (Multi System Operators) are not in favour of the strike declared by the cable TV operators.

A highly placed source in the MSO space told exchange4media that the strike called by the cable TV operators is not justified.

“The TRAI regulation is in favour of the consumers. If the new tariff is implemented, the consumers will get an opportunity to opt for channels of their choice. There are Free-to-Air channels and pay channels, so it is the duty of the cable operators to sell the pay channels to the consumers. The operators get a commission of 20 per cent for every pay channel they sell. In my opinion, the operators don’t want to put in efforts for doing the sales pitch or convincing the consumers in getting pay channel packs,” said the source.

He continued, “Another demand that they have is to slash down the GST rates. Around 80-85 per cent of the local cable TV operators do not hold a GST licence. The new regulation will bring more transparency about the system and that is the reason cable operators are opposing the move by TRAI.”

Another source from an MSO based in South India said, “We want to implement the tariff policy by TRAI. The customers are given priority and options. Also, the new regime will have a control over the system.”

One of major concerns raised by LCOs is about educating consumers about the new tariff policy.

Answering the question, the source said, “We are doing a lot of on-ground campaigns to educate consumers about TRAI’s new tariff regulation. We are keeping the consumers updated about the policy through text messages and information on the policy is also passed through the local cable channels. Our 24*7 customer care services are also addressing the queries by the consumers. Also, campaigns informing and educating the consumers on the new policy will appear in regional newspapers in coming days.”

A third source, an MSO-based in South India, questioned if the strike was legal.

“If the strike by LCOs doesn’t adhere to the regulation, legal actions should be taken against them. The strike will result in black out of the TV screens and we need to check whether there are any regulations to switch off the signals for such a long period. The network must run on sales-based revenue and the LCOs need to do the sales pitch for selling pay channels to the consumers. We are doing our part in educating the consumers. The system is going to be transparent,” the source said. 

Some other major MSO players who e4m approached on the issue declined to comment.

Cable TV operators, meanwhile, say that they stand by their decision to go on strike on January 24.

D Arumugam, President, Thamizhaga Cable TV Operators Association (TCOA), said, “We are not backing out from the strike. The new regulation by TRAI is one sided and LCOs will have huge revenue loss if the regulation will come into effect.”

K Govindan, Executive member, Cable TV Association (COA), Kerala, said, “We are not against the tariff regulation, but the LCOs have concerns regarding the base fare and GST that should be addressed. Also, the campaigns by broadcasters are also passing on wrong information to the consumers. When a channel is advertising about their pricings and plans, they are not speaking about the base fare. This Ambiguity should be removed from the advertisements.”

However, according to sources, few LCOs from south India won’t be participating in the strike.

exchange4media reached out to TRAI authorities for a comment on the issue, but they were not available till the filing of the copy.

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