New framework planned taking all stakeholders into consideration, says TRAI's SK Gupta

According to TRAI Secretary SK Gupta, at the time of NTO implementation, broadcasters were up in arms claiming that it will harm the industry but broadcasters and DPOs ended up profiting from it

e4m by Naziya Alvi Rahman & Sonam Saini
Updated: Jan 12, 2020 12:49 PM

The Telecom Regulatory Authority of India's (TRAI) New Tariff Order (NTO) 2.0 has brought industry leaders together to discuss TRAI’s recent amendments to Tariff Order, Interconnection Regulations and Quality of Service Regulation of 2017 for the broadcasting and cable services sector. The NTO 2.0 has raised concerns among the broadcast industry that the second order will put a burden on consumers and further damage the industry and disrupt the business.

Speaking to exchange4media, TRAI Secretary SK Gupta said that the new framework has been planned and has been made considering all repercussions to all the stakeholders and it will benefit everyone in the ecosystem. He also mentioned that “At the time of implementation of NTO 1, everybody including broadcasters, were up in arms, saying that it will harm the industry, but at the end of the day all the broadcasters and DPOs ended up getting a lot of profits on that and they were very happy. When we circulated the consultation papers in September, they were telling us that there is no need to have any changes, because we are all very happy. We are sensitive to the developments happening in this sector. There was some tweaking that needed to be done to ensure that the very purpose of the regulation is fulfilled and accordingly modification has been done.”

Gupta further explained that TRAI has done a very exhaustive consultation charging from 2015 onwards which were taken to different courts of law and thereafter about two and a half years of litigation and final decision of the Supreme Court, implemented it in December 2018.

“This order is a very remarkable order because it gives flexibility to all the stakeholders to do their business. As far as DPOs are concerned, DPOs can get a fixed return on their investment so that they can upgrade their network to provide better services to consumers. There is a very clear cut framework for having an agreement between the broadcasters. There is a choice that consumers can make. We have given complete freedom to the broadcasters to price their channels as they wish with a minor condition that if you want to put your channels in the bouquet it will not have the MRP of more than Rs 19.”

When the NTO 1 was implemented most of the things like the transparency of the rates to the consumers, the money which has to be given to DPOs directly, the freedom to the broadcasters to price their channel, the permission of bouquet was done. Unfortunately, it was done in such a manner that in certain cases DPOs and primarily the broadcasters formed the bouquet in such a manner where consumers were forgotten.

For instance, the GEC channels which happen to be in the range of Rs 8 -9 all were planned and priced at Rs19. Given this flexibility, assuming that all the broadcasters also behave in a very rational manner and take care of the interest of consumers but unfortunately, it happened the other way round.

Similarly, there is a relationship between the a-la-carte and the bouquet, primarily some observations were passed by one judge in the High Court and the verdict was given on the issue in the SC. “They started giving huge discounts on the a la carte vs bouquet. The issue is very simple if you want to give the choice to the consumers we are not either pro- a la carte or pro- bouquet. We are transparent to the consumer. To keep things transparent to the consumer, let the consumer choose what to watch,” he said.

Gupta raised a question that if they are giving a discount of 50% and some people are giving a 70% discount, so if you are giving that discount on the bouquet why can't it be given on the a la carte also. The second thing that happens is when you are selling the bouquet the consumer generally understands that it is Rs. 20 bouquets with 10 channels all of which are roughly Rs. 2 each. They don't understand the different constituents and what's the price of that. He further adds, “In contrast to that, the bouquet as of now is having few channels which are less than Rs 1 and some channels are Rs 19. They are putting two discrete types of things in one bouquet and transparency not giving to consumers.”

He also said, in fact, they are making a package which is non-transparent and giving them to the consumers. "Now they say that they have been suffering losses. They themselves have said in various meetings because of economic slowdown the advertising revenue is suffering but despite that in the earnings of all the broadcasters, the revenue has been up by minimum 20% by only subscription revenue.”

Gupta refused to comment on the IBF press meet that happened this morning and said, “I am not aware what exactly they have talked about, therefore, I will not be able to talk much on that particular issue. It's not a debate, which I want to indulge in. There are different stakeholders who have supported including broadcasters, not just the four stakeholders but there are regional and news broadcasters as well. They all have suffered and the suggested that little modification required. It is not just the four stakeholders, we have to look at the complete industry and have to act on it, Gupta concluded.

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