Tata Sky, India’s second largest DTH provider, has canceled all the long-duration packs it was offering to consumers and will move the users to monthly packs.
This applies to all its users, including those who purchased long-duration packs this week.
Many users had got special offers on long-term recharges, such as those that are valid for one year, and opted for the same, assuming that they would be protected against any price increase caused by the implementation of the new tariff scheme mandated by TRAI from Feb 1.
TRAI too had given permission to all cable and DTH companies to continue their long-term and yearly packages, as long as they paid the full amount as required to the channel owners.
However, Tata Sky seems to have decided it was better to cancel the yearly packages instead of trying to tailor them to suit the new TRAI rules.
“TRAI’s latest Tariff Order mandates a new tariff structure to which all subscribers need to migrate. For users currently subscribed to a long duration pack, Tata Sky will migrate you to a monthly pack of your choice on / after 1st February 2019 and credit the applicable balance in your Tata Sky account as soon as you are switched to monthly packs,” the DTH operator said.
The move is not surprising, given that Tata Sky was providing nearly all channels at around Rs 500-600 per month. However, under the new pricing announced by broadcasters since July last year, most of such packages would become more or less unworkable for Tata Sky, or eat into its profits.
The move, however, is bound to disappoint users who renewed or bought long-term recharges even after TRAI announced the switch over to the new regime.
Even though it was plain that many of these plans were not workable due to the new tariff structure, many users still went ahead and purchased them, assuming that somehow Tata Sky will find a way to continue them.
Now, those users will have no option but to shift to new channel packs conforming to the new TRAI rules and use up the refund money that Tata Sky has put in their accounts.
The refund process gives Tata Sky the advantage of having a bunch of dedicated and captive users who will stick with the DTH player for the next few months as they would want to use up their balance even if they want to shift to another DTH operator.
This gives Tata Sky an assured source of revenue from these accounts for the next few months, when things could get very uncertain due to fluctuations in channel prices and packs.
It is expected that broadcasters like Star, Zee and Sun will be forced to cut the prices of their channels and packs drastically in the coming days.
While any cut in the channel prices has to be passed on to the customer by players like Tata Sky, there is no obligation on the part of cable and DTH players to carry cheaper channel packs, especially if these are introduced as new plans and not price cuts.
Meanwhile, Tata Sky’s website was showing signs of stress due to the huge number of consumers trying to access the site to get details of the new packs and plans and change their subscription plans.
Customers have till Jan 31 to switch to new plans. After that, they will be put in an pack or plan chosen by the DTH player. Customers can, however, migrate to a plan of their choice even after Jan 31.