Will NTO 2.0 be able to meet the objectives this time?

Industry experts have expressed concerns on whether TRAI will be able to fulfill its goals like empowering consumers and reducing TV bills or will it lead to more rounds of amendments

e4m by exchange4media Staff
Updated: Jan 28, 2020 9:39 AM
TV

The Telecom Regulatory Authority of India’s second round of amendments to the New Tariff Order has come under immense scrutiny lately. While the regulatory body has been contesting that NTO 2.0 will usher in better consumer offerings, more flexible tariff schemes and increased choices for consumers, several industry players have questioned this justification.

“Earlier, there was lack of clarity on the pricing and there was no set MRP for channels. The consumers too didn’t have the power to select the channels that they wished to watch. The main objective of bringing the New Tariff Order was to empower the consumer to be able to select channels. However, NTO 2.0 clearly indicates that NTO 1 could not achieve this core objective as the consumer ended up paying more,” said an industry expert on the condition of anonymity.

Another analyst said, “When TRAI came up with NTO 1, they aimed to bring in transparency and empower consumers, but they couldn’t meet this objective of giving consumers a choice and reducing the TV bills. What is the guarantee that NTO 2.0 will meet those objectives and MRPs won’t be revised again?”

Even the regulator mentioned in its official statement that the aim of allowing consumers to select channels that they wanted had got scuttled due to various issues during the implementation of the New Tariff Order. However, the regulator has also claimed that the framework was quite successful in various fronts like “establishing a harmonised business processes in the sector, level-playing-field, bringing in transparency in TV channel pricing, reducing litigations among stakeholders and providing equal opportunities to smaller Multi System Operators (MSOs)”.

Contesting this claim further was one of the broadcasters who said: “After the implementation of NTO 1, the broadcasters witnessed a sharp decline in viewership and in advertising revenue as well. Now with NTO 2.0, where is the level-playing field as the authority has capped channel pricing at Rs 12 as against Rs 19 in the past? Content is expensive and broadcasters invest huge amount of money in content creation. How will this benefit the broadcasters?” 

Among the key concerns raised by the Indian Broadcasting Foundation (IBF) were - arbitrary reduction of the MRP cap from Rs 19 to Rs 12 for channels to be part of a bouquet, imposition of twin conditions on bouquet pricing and restricting incentives only to a la carte. 

Another important objective of NTO 1 was to reduce disputes among the industry stakeholders. An industry expert said, “There was no transparency in the revenue of broadcasters and DPOs. The value chain was not defined. The dispute among the broadcasters versus cable operators, and MSO versus LCOs were brought up before TDSAT on a regular basis. TRAI also wanted to regulate the entire industry and bring in regulation so that everybody followed a similar format.” This objective was achieved to some extent with fixed pricing, he said. 

According to TRAI, the amendments are expected to result in a healthier and structured growth of the Broadcasting and Cable Services sector. However, these were the same objectives TRAI mentioned while introducing the New Tariff Order in 2018, industry players have pointed out with several players in the media ecosystem raising their concerns. 

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