Trigger-happy regulatory intervention not good for the industry: Uday Shankar
Shankar, President of The Walt Disney Company APAC & Chairman of Star and Disney India, spoke at an IBF meet held to address recent amendments made to TRAI's NTO
Following the Telecom Regulatory Authority of India (TRAI)’s recent amendments to the Tariff Order, Interconnection Regulations and Quality of Service Regulation of 2017 for the broadcasting and cable services sector, members of the Indian Broadcasting Foundation came together to address the issue on Friday.
Uday Shankar, President, The Walt Disney Company APAC & Chairman of Star and Disney India, said that he doesn’t remember in the last 7-8 years when the IBF as a whole body has come together to address the media. Because he believes their job is to create content, not become part of the content.
He explained, “The last time, to the best of my memory, the IBF came together as a body to address the media on a very constructive cause, back in 2010-2011 when we were working with the government to initiate the process of cable digitisation. So imagine the disruptive significance of the initiative by the TRAI, that is has forced all of us to come together to talk directly with the media. Please understand how seriously disruptive the implications of this are and how troubled we are about that.”
The second thing I want people to understand is that in September 2003, when the TRAI came into existence and was given the charge of managing the distribution and stakeholder relationship, from then on there was a tariff regime that was frozen and there was nothing done for a long time, to the extent that the Supreme Court had to intervene and say that a comprehensive tariff exercise had to be done. And that is when the authority woke up towards the need for a tariff revisit. Now in less than a year, two tariff exercises have been done. “I'm not a legal person and I'm not a regulator, but it doesn't make sense if a thoughtful, comprehensive, collaborative tariff exercise was done last year, or two years ago, then what is the need for this one?”
He mentioned that it clearly means that the previous exercise was not thoughtful. Because only then there is a need for tweaks in less than a year. "It hasn't even been allowed to settle down, as the president of IBF was saying, we've spent literally a thousand crores in educating the consumers and educating the ecosystem about the new tariff structure even before it has settled down. I think despite some of its shortcomings, it was taken off the ground pretty well. Over a crore and a half people had opted for the a la carte channels, so it was moving in the right direction and then suddenly the whole thing had to be reset to zero. So this kind of trigger-happy regulatory intervention at a very fundamental level clearly is not good for the industry and the regulator seems to not care that part of its job is to create an enabling framework for the industry to grow and all stakeholders to benefit, and for the consumers to get the best kind and best range of content that they deserve." Shankar continued.
“And finally, if the regulator is so concerned about bringing down the price for the consumer, then why in the name of an LCF, the distributors are being allowed to charge as much as Rs 160? Theoretically, they can charge anything up to Rs 160 for only providing Free to Air channels. Just to understand the ludicrous contradiction of this order, the same channels could be obtained by the consumer by going to DD Free Dish. So something that the Free Dish makes available for free, the regulator, in the name of bringing down the burden on the consumer, has allowed the DPOs to charge up to Rs 160."
"It is being made out that it is about lightening the burden on the consumer, the last time this exercise of the tariff was done a year ago, this is exactly the point I remember made and all of you reported that. We had pointed out even then, that the prices for the consumer will go up and it did go up. This time, in order to clean up a mess that has been created by regulatory interventions, they are saying, once again we need to intervene, that sounds a little funny.”
"The cable subscription rate that should have been zero, as in the case of Free Dish, for those channels; the base table went to Rs 130. The other factor that took the prices up, was because the discounting had been very severely reduced. Discounting and bundling gave consumers the option of having more channels at lower rates. If I want to promote my channel, I would discount it, and it's a very standard practice in every industry and in media all over the world. So I don't see where the problem was".
"If at all a tweak was required, a tweak would have been achieved by giving more flexibility in discounting, and that is the irony in this new tariff order; that by further reducing the discounting options, the regulator is setting the consumer up for having to pay more first".
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