No stability despite NTO 2.0, say experts

While broadcasters say that NTO 2.0 has only added to the instability, TRAI says it's just ‘teething troubles’

e4m by Tasmayee Laha Roy
Updated: Jan 22, 2020 9:30 AM

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TRAI

With constant changes being introduced to channel pricings by the Telecom Regulatory Authority of India (TRAI), both broadcasters and consumers feel the impact of instability.  Is unstable pricing mechanism adding chaos to the already chaotic broadcast industry?

In December 2018 TRAI put a cap on Rs 19 as the threshold for a channel for creating bouquets. The broadcasters changed their channel pricing accordingly.

Cut to December 2019. With the threshold being brought down by over 35 per cent, capping the MRP at Rs 12, channel prices are all set to change again.

While the regulator introduced amendments to make pricings more consumer-friendly, the consumers themselves were left confused and the broadcasters have been constantly changing channel pricings.

“OTT is still not the primary choice for content, so TV is still a very important part of households across the country. The constant change in pricing is leaving everyone confused. First, there was NTO which changed cable and DTH bills then there were festive discounts which made the bill look different for a while now there is another disruption in terms of channel pricing. This puts the entire mechanism under a constant change. A regulatory body is expected to bring in stability. Looks like TRAI is not concentrating much on it,” said one of the broadcasters.

According to data provided by TRAI, there were major changes in channel pricings after NTO implementation. The body calls it’s a misuse of freedom. Misuse or not, it altered cable and DTH bills for every household.

“When we had given them the freedom to price their channels however they want, to the broadcasters implementing NTO in December 2018, five top broadcasters increased the price of nine of their channels by more than 200 per cent and the same set of broadcasters increased the price of 19 of their channels by more than 100% and there were several other channels whose price was increased by a good margin. Now, as a regulator, it is our duty to ensure that such aberrations should not happen in the sector and consumers should not be put into such situations where channel prices see a sudden and harsh increase,” said TRAI Secretary SK Gupta.

But are anomalies so easy to get rid of? “Neither NTO nor its second version is all black and white. TRAI was trying to find a balance between broadcasters and consumers, but broadcasters naturally look for business and consumers look for a cheaper and easier billing format, leaving both confused with constant changes introduced to regulations,” said the CEO of a popular GEC channel.

“Markets arrive at a natural equilibrium, but this isn’t a market like that, and TRAI’s intervention to bring in a fair equilibrium is only adding to the confusion. Models are being constantly disrupted and consumer education, which is a long process to arrive at a stable point, is also being disrupted in the process,” he added.

TRAI, however, doesn’t feel likewise. “In 2004, when the government brought the broadcasting and cable television services within the ambit of telecommunication services for the first time, a completely new framework was issued after a lot of litigation. Then there was December 2018 and NTO, after which we came up with these new amendments. There is no constant change in the industry as many say. Whenever changes are made to a framework, there will be some teething troubles and our endeavour is to solve that,” said TRAI chairman RS Sharma at a press conference last week.  

But has TRAI finally managed to reduce bills and bring stability? While that question remains unanswered, TRAI chairman said, “We had no expectations of the so-called price reduction while implementing NTO. We only created a framework where consumers have full independence in choosing what to watch and pay for that only. So if someone opts to watch all 500 channels his bill will obviously go up.”

 

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