TRAI gives extra time for selecting new packs; creates confusion among cable, DTH operators

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The Telecom Regulatory Authority has given time till Mar 30 for those subscribers who have not exercised their choice under new TV channel plans.

The cable and DTH providers have been told to move customers who fail to exercise their choice to a ‘best fit plan’ according to their channel choices and plan. It should be noted that the leniency is largely for cable and DTH firms instead of customers, and they can move their customers to such ‘best fit’ plans at any time before March 31.

In other words, a cable or DTH operator can move a subscriber to a ‘best fit plan’ tomorrow, and the customer cannot claim that he has time till March 31 to make up his mind.

It is likely that many of the customers will be moved to such plans very fast, as not moving them to the new plans results in a financial loss for the cable or DTH firm.

Cable and DTH firms have to pay the higher rates applicable under the new tariff plan for each customer that they have, whether or not they have been moved to a new plan or not. Hence, they are likely to do so quickly.

TRAI also said that those subscribers who have already been moved to the new plans cannot be put back into their old plans under any circumstance.

CUSTOMER CHOICE

In case any customer is moved to a ‘best fit plan’ and doesn’t like the same, the customer can request the cable or DTH operator to modify his plan according to his or her wishes.

TRAI said that ‘lock in’ periods, which are otherwise applicable to many packs and plans, will not be applicable to these ‘best fit plans’ and any customer should be allowed to modify his or her ‘best fit plan’ at any time.

Many channels have opted for ‘lock in’ periods of 1 month on their channels and packs. Under this, if you subscribe to one of their channels or packs, the same cannot be canceled before one month is through.

If the cable or DTH operator allows the customer to cancel the subscription within one month, then the cable or DTH operator has to still pay one month’s charges to the channel owner.

However, explained TRAI, this will not apply to customers forcibly moved to ‘best fit plans’. This indicates that such best fit plans are unlikely to contain any pay channels, as these come with lock-in periods.

BEST FIT PLANS

Best fit plans have to be designed in such a way that the subscriber gets as many of his existing channels as possible, without going over his current monthly bill, TRAI said.

In other words, if a person is getting 250 channels for Rs 300 per month, and fails to exercise his choice under the new tariff regime, then the person can be put on a pack that has only 100 channels, and costs Rs 300 per month.

” ..the Authority directs all DPOs that those subscribers who do not exercise their options shall be migrated to a ‘Best Fit Plan’. The subscribers’ old plan shall continue till either subscriber exercise his or her choice or he or she is migrated to the ‘Best Fit Plan’.

“The Authority hereby extends time up to 31st March 2019 for exercising the option by such subscribers who have not exercised option yet.

“Subscribers will be free to change their ‘Best Fit Plan’ at any date and time on or before 31st March 2019 and DPOs shall convert their ‘Best Fit Plan’ into the desired pack (channel/Bouquet) within 72 hours from the time choice exercised by the Subscriber,” it said.

The move is likely to give some respite for rural subscribers and cable operators to implement the new tariff scheme.

CONFUSION

There is still some confusion on part of DTH and cable operators about the question of how they will be charged for customers who continue to remain on old tariff plans.

If they are charged at new rates, it would result in a big hit to their profits, as the new rates are much higher than the old rates.

TRAI was silent on this aspect.

On the other hand, if cable and DTH operators are allowed to not pay new channel rates to broadcasters for these customers, then it will result in an accounting challenge and confusion as it will be difficult for broadcasters to figure out exactly how many customers of a cable operator are on new plans and how many are on the old plans.

Moreover, the legal validity of the old supply agreements — with lower rates — lapsed on January 31, and it would be legally difficult for cable and DTH operators to pay to broadcasters under the older rates.

It also has to be kept in mind that the older contracts were not based on a ‘per head’ basis, but on a lumpsum basis for all of the customers of the cable or DTH operator. In other words, the older contracts said something like the cable operator has to pay Rs 500 cr per year to the broadcaster, irrespective of how many people watch the channels.

In contrast, the new pricing contracts — which came into effect from Feb 1 — says that the cable or DTH operator will pay Rs 5 or 10 or 15 for each customer who is watching a particular channel.

If some customers are on the older scheme, and some on the newer scheme, DTH and cable operators may have to pay both the Rs 500 cr charge as well as the Rs 5/10/15 charge, which would be untenable for them financially.

As such, it is more likely that operators will have to pay under the new pricing contract whether or not their subscriber has been moved to a ‘best fit plan’ or continues on the older plan.

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