TRAI disputes CRISIL report, says cable, DTH not more expensive

TRAI said the CRISIL report was based on wrong assumptions

Media regulator TRAI today issued a clarification on a report by the research wing of credit rating agency CRISIL in which the agency had claimed that the introduction of the regulator’s new TV pricing norms will increase cable and DTH prices.

CRISIL had taken the example of the most popular channels to arrive its conclusion that the new schemes will increase the monthly outgo from cable and DTH consumers.

TRAI, however, took issue with the way the calculations have been carried out.

“Recently, on the basis of a report from CRISIL, some media reports have claimed that the new framework will result in increase in monthly TV bills substantially. This report has been prepared on an inadequate understanding of the TV distribution market. The report is based on choosing top rated channels on all India basis and considers only one weekly report dated 25th January 2019, from TV Rating Agency, BARC.

“The selection of channels by subscribers is primarily driven by language, genre, region and culture. The report fails to appreciate that even among top three channels (Scenario I) that is SUN TV, ZEE Anmol and STAR MAA, the language is Tamil, Hindi and Telugu respectively. It is unlikely that one family will choose Tamil, Hindi and Telugu Channel simultaneously. This is more glaring in the scenario III where TV Channels of Hindi, Tamil, Telugu, Bangla, Malayalam and English have been considered together. Similar is the situation in scenario II also. The report is not based on detailed and focused analysis, supported by data. This report is more likely to mislead the subscribers while they are likely to migrate to new framework and would result in misunderstanding,” it said.

The regulator is rather sensitive about the portrayal of the new plans in the media as it has come under attack from consumers on social media for increasing their monthly cable and DTH bills.

Such attacks on TRAI is without keeping in mind the fact that the original scheme of the regulator would indeed have substantially reduced monthly cable and DTH prices, but was subjected to changes by the Madras High Court.

The changes introduced by the Madras High Court took the power of ‘package formation’ from the hands of the consumers and gave it to channel owners, increasing consumers’ monthly outgo as they now have to pay for unwanted channels inside such packs.

In its original set of regulations, the TRAI had prohibited channel owners from jacking up the prices of their channels to unreasonable levels to push their packs. It had insisted that if a channel is being sold at Rs 85 inside a pack, then its price cannot be more than Rs 100 when sold individually.

This provision, known as the 85:100 rule, was struck down by the Madras High Court.

As a result, currently, channels priced at Rs 85 inside a pack are being sold at Rs 150-300 outside it, which has forced consumers to buy packs that include unwanted and unnecessary channels — thus increasing their monthly cable and DTH bills.

TRAI’s clarification today was silent on the topic of implementing the 85:100 rule. This could be because Tata Sky, Sun Direct and Airtel Digital are arguing their case for the implementation of this rule in front of the Delhi High Court.

PRICES WILL COME DOWN

TRAI also asked consumers to be patient, and pointed out that channel owners will have to reduce their prices and offer better deals if they find that consumers are not buying their channels at current prices.

“The new framework promotes consumer choice and enables the subscribers to pay for what they really watch. The new framework has been designed after balancing and providing for the proportionate revenue for various service providers in the service provisioning value chain. The basic architecture of the framework provides for fair competition among broadcasters and the real prices will be discovered after few weeks. For the first time a subscriber can see the offered prices of a TV channel on their own TV screen thereby removing any information asymmetry. These are early days and detailed data-sets will be available only after a few weeks,” it added.

“Subscribers may note that the new regime empowers them to change their choices whenever they desire. They can add channels for a month or for multiple months whenever a program of their choice is broadcast, thereby providing sufficient flexibility. The subscribers can always request their service provider to modify (add or delete) their selection, even after choosing any package at present. All the subscribers are requested to choose wisely and select those channels that they wish to actually watch,” it added.

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