Most cable and DTH operators in India have failed to comply with TRAI’s tariff order issued that came into effect today in perhaps the first such incident in the industry’s history.
As of today, the amended provisions of the Telecom Services Tariff Order, notified two months ago, have come into place.
However, as of 8 AM today, most cable and DTH operators continue to offer channel packs containing expensive channels, while the new rules and regulations that were notified on January 1 expressly forbids this.
“Every distributor of television channels shall offer to all subscribers each bouquet of pay channels offered by a broadcaster, and for which interconnection agreement has been signed with that broadcaster, without any alteration in its composition and declare the distributor retail price, per month, for such bouquet payable by a subscriber…provided further that such bouquet shall not contain any pay channel for which maximum retail price per month declared by the broadcaster is more than rupees twelve..” says The Telecommunication (Broadcasting and Cable) Services (Eighth) (Addressable Systems) Tariff Order issued by TRAI.
A look at the selfcare portals and websites of the major DTH and cable platforms revealed that these operators have not implemented this direction, and continue to offer such packages.
They are also supposed to reduce their network charge with effect from today.
There is no clarity why these operators have not implemented the regulations, and whether TRAI plans to take any punitive action against these cable and DTH players.
India’s biggest DTH operator Tata Sky, however, has complied with the parts that have cut the network charge or NCF.
TRAI had asked cable and DTH operators not to sell any pack containing any channel which is priced above Rs 12.
This was done to put pressure on channels to bring down their prices and reduce the monthly cable/DTH bill of ordinary consumers. Consumers have been complaining of a huge jump in their monthly bills ever since TRAI gave channels the power to decide their own prices.
Channels had approached the Bombay and Madras High Courts with a request to stay the new TRAI rules, but failed to get any stay or interim relief. It was, therefore, expected that there would be compliance today.
At present, most of the popular/premium channels are priced at Rs 19, or Rs 22.42 including taxes. TRAI wants channels to bring this down to at least Rs 12, but without putting in a price cap.
To make sure that they do this, the regulator issued the new rule that any channel that is priced above Rs 12 cannot be sold as part of any pack by cable and DTH operators. Since most people buy their channels in packs, it was believed that this restriction will pressure broadcasters to bring down their prices.
However, with cable and DTH operators apparently ignoring the TRAI rule, there is now little chance of the prices of any channel being brought down.
As late as two weeks ago, TRAI had sent a reminder to all cable and DTH operators that the new rules will come into effect on March 1, and they must put the necessary infrastructure in place to implement it.
“As you are aware, the provisions of the Tariff Amendment Order 2020 are to come into force from 1st March 2020 and several preparatory activities are to be carried out by service providers in a time bound manner. This is to ensure that sufficient time is actually available to the consumers to exercise their choice of channels and bouquets before 1st March 2020. Therefore, all service providers concerned may take suitable steps to ensure that the consumers have enough time to make their choices of channels, so that the smooth transition takes place on 1st March 2020,” it had said in its letter.
However, despite the reminders, most industry participants seem to be in no mood to implement any of the provisions.
It remains to be seen how TRAI manages to come to grips with the situation.
The TRAI has several weapons at its disposable to bring erring companies into line. It can impose fines, or even recommend for the cancellation of a cable or DTH operator’s license.
However, since the license is issued by the central government (ministry of information and broadcasting), the final decision has to be taken by the ministry. Most industry participants believe that the MIB will do no such thing.
The fines that TRAI can impose are also not substantial, and will not make much of a difference to companies whose annual revenues are in thousands of crores, or even tens of thousands of crores, of rupees.