Bad news for cable, DTH players: TRAI says long-duration packs must continue

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The Telecom Regulatory Authority of India today set the cat among the pigeons among cable and DTH operators by saying that customers should be given the option of continuing with their long duration packs if they so desire.

This has potential negative implications for all operators, including Tata Sky, D2h and Airtel Digital, as all of them were offering one-year plans for prices ranging from Rs 3,000 to 7,000.

Under these long-duration packs, customers get access to many — sometimes all — channels at discounted rates in exchange for making a long-term commitment.

“The Authority further reiterates that subscribers who have taken long term packs will continue to avail the services for the contracted period. However, they have freedom to choose the channels of their choice under the new regulatory framework and in case if they exercise this option, money for the remaining period shall be adjusted for their future use,” it said today.

Many of these operators were selling long-duration packs as late as in December.

According to TRAI’s new clarification, a customer who subscribed to a one-year pack in December must be given the same service till December 2020.

While this may sound obvious, for the cable or DTH operator, it has set the sirens ringing.

This is because the prices that cable and DTH operators have to pay to the owner of the channel has gone up substantially from Feb 1 in most cases. In other words, input costs have doubled or trebled in some cases.

But since these cable and DTH operators have committed to provide all the channels for one year, they now have to continue to offer those channels even if it means that they have to suffer a loss by doing so.

The situation is not entirely unexpected.

TRAI had announced in July 2018 that the new tariff schemes will come into effect from December 2018. But cable and DTH companies continued to offer long-duration packs even after TRAI made the announcement even though they knew that it may be difficult to offer the channels after the switch over.

FORCED CONVERSIONS

Meanwhile, many cable and DTH operators are forcibly converting their long-duration pack customers to monthly packs and refunding unused amounts.

This has led to customer uproar on social media. Many customers have also written to TRAI saying that the cable and DTH operators knew clearly that new prices would kick in from Dec 28 and continued to sell these long-duration packs to their customers.

As such, the customers say, they should be forced to honor their commitment since it is a calculated risk that they took by offering such plans even after it was clear that prices of channels were due to change on Dec 28.

TRAI’s latest clarification is likely to add fuel to the fire of consumer anger and lead to cases in consumer courts.

Some consumers are already organizing a ‘class action suite’ under the Consumer Protection Act.

Class action suites can be filed on behalf of or for the benefit of all the consumers of a particular brand or company, having a common interest or a common grievance and seeking the same / identical relief.

Consumers can also file individual cases against their service provider by writing down their complaint in a white paper and attaching print-outs of their receipts and bills at their respective district forum.

Consumers can file for damages and compensation, and consumer courts often award anywhere between Rs 10,000 to lakhs of rupees, based on the extent of ‘mental agony’ suffered by the consumer. They often also impose fines and penalties in addition to the compensation paid to the complainant.

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