TRAI’s New Rules For Cable And DTH: Why Have Our TV Subscriptions Become More Expensive?
The TRAI clarification suggests this move to is to stop users from “hoarding” TV channels in their subscription. It is something that we really don’t understand.
What started out, and also initially seemed to be a noble move to reduce our cable TV and direct to home (DTH) subscription bills, has turned out to be anything but that. Once the excitement has died down and the smoke has cleared away, it doesn’t really require you to be a rocket scientist to figure out what is what with the new Telecom Regulatory Authority of India (TRAI) guidelines that dictate the pricing of TV channels and subsequently your subscription. Here is what is in store for you, if you are about to make a switch from your current cable TV or DTH subscription plan to the new plans curated based on the new TRAI guidelines.
The new pricing system, which is applicable on February 1, requires broadcasters to publish the tariffs for each channel (also known as ala-carte) and also for curated bouquets of channels. Subsequently, all cable TV providers such as Hathway and Den, and DTH companies such as Tata Sky, Airtel Digital TV, Dishtv, d2h and Sun Direct were mandated to implement the new pricing for their channel offerings. The regulator has also ruled out any extension of the deadline for the implementation of the new tariffs. “The Authority reiterates that there is no reason to consider any extension in view of the significant momentum in obtaining the choices and the assurances of all the service providers," TRAI had said in an official note released on 24 January.
The new pricing system, which is applicable on February 1, requires broadcasters to publish the tariffs for each channel (also known as ala-carte) and also for curated bouquets of channels. Subsequently, all cable TV providers such as Hathway and Den, and DTH companies such as Tata Sky, Airtel Digital TV, Dishtv, d2h and Sun Direct were mandated to implement the new pricing for their channel offerings. The regulator has also ruled out any extension of the deadline for the implementation of the new tariffs. “The Authority reiterates that there is no reason to consider any extension in view of the significant momentum in obtaining the choices and the assurances of all the service providers," TRAI had said in an official note released on 24 January.
This means that all existing channel packages that you may have subscribed to or the DTH or cable company may be offering to new and existing subscribers, will be dismantled. Your current subscription, will require you to switch to the new tariff plans which all cable and DTH companies are now rolling out, to continue watching your favourite channels post 31 January. The long duration packs, which used to be more cost effective, have also been withdrawn by DTH operators—and there is no clarity on any rules on guidelines around that from the TRAI just yet.
While you may begrudgingly shift to the new TRAI mandated tariff plans, there are a few more question marks about what changes are in store. Apart from the significantly higher price that you will now pay, or sacrifice significantly on the number of channels that you can watch.
While you may begrudgingly shift to the new TRAI mandated tariff plans, there are a few more question marks about what changes are in store. Apart from the significantly higher price that you will now pay, or sacrifice significantly on the number of channels that you can watch.
One of our primary concern continues to be what happens with ‘multi-tv’ connections—basically, if you have multiple set top boxes (STBs) listed under the same subscription, usually for multiple televisions at home. DTH operators we spoke with still are not clear about any guidelines for multi-TV connections forthcoming from TRAI, even though they are now requesting subscribers to switch to the new plans on their websites or via the smartphone apps. Under the present and subsequently outgoing tariff plans, cable and DTH companies usually offered the same package on the multi-tv STBs too, but at a significantly discounted price. As of this moment, Tata Sky has clarified the pricing policy for the secondary STBs, which now depends on the package that you have chosen for the primary STB. If you primary STB package is up to Rs 250, then each secondary TV will be priced at Rs 200. If the package is up to Rs400, then each multi-TV is priced at Rs300, if the package is up to Rs 400, then each multi-TV costs Rs 300 and so on, up to Rs 700 per month for each additional connection.
Then there is the small matter of the Network Capacity Fee (NCF) which has been added to your cable TV or DTH bill by TRAI. This, as described by the TRAI themselves, is a “ rental charge of the TV connection to your home.” What really was the need to add this rental component, remains a mystery. No cable TV or DTH operator over the years has demanded any sort of rental over and above the package subscription fees (and more affordable than what awaits us, mind you), which makes this addition all the more perplexing. Incidentally, the more channels you subscribe to, the higher the rental. The way this works is that you pay Rs130 as rental for the first 100 channels in your subscription, which could be pay or free-to-air channels, bouquets or pretty much any combination. Post that, you pay Rs20 additionally for every 25 channels that you add to your subscription.
TRAI says that you shouldn’t burden your subscription with what TRAI Chairman RS Sharma calls “channel hoarding”. If you are as perplexed about this terminology as we are, then perhaps his statement to the PTI might clear things out for you (or it might not, mind you), “Many a times, people buy goods they don't need today but think they will need tomorrow. Tomorrow, if they want to watch a channel they can buy it… why should they hoard the channel because it is a costly hoarding as they have to pay for it too.” If “hoarding” really was TRAI’s worry, they could have simply asked DTH companies such as Tata Sky, Airtel Digital TV and dish TV as well as cable companies including Hathway and DEN to offer each channel as ala-carte too—with consumers getting the simple option of carrying on with their existing channel packs and subscription (albeit as per the new pricing ceiling for broadcasters) or switching to the ala-carte packs. But why force everyone to change?
The TRAI has also not given clarity on if there can be long duration packs once the new tariff guidelines come into effect. As of this moment, DTH and cable operators are insisting that users shift to new tariffs that are going to be charged monthly. Going by the past trend, longer duration packs, which we would normally pay in one go for a 3-month, 6-month or 1-year subscription in advance, usually came with some discount or the other, which reduced the financial burden on consumers.
While we must appreciate TRAI’s exercise of rejigging the tariffs to make TV subscriptions more affordable, it could surely have done a lot better by perhaps doing a bit lesser. As the old adage goes—if it isn’t broken, don’t fix it. TRAI could perhaps have started out by setting an upper limit on the channel prices which broadcasters fix for their portfolio of channels, made it mandatory for them to offer each channel as an ala-carte option and introduced guidelines about broadcaster bundles.
However, TRAI have probably gone a couple of steps ahead, and is now not only dictating the pricing of each channel package, but also in many ways uprooting the deals DTH and cable companies would have done with broadcasters. Those deals meant lesser prices than we will now have to pay, as we illustrated in our detailed comparison. By doing this, the TRAI is altering multiple layers in that chain, perhaps unnecessarily. That has meant that your TV subscription is going up, or you will end up subscribing to a lesser number of channels that you are used to. We really don’t understand the need for completely tearing apart the current subscription packages, which could have done with regulation such as a price ceiling. That too, when many questions remain unanswered.
Then there is the small matter of the Network Capacity Fee (NCF) which has been added to your cable TV or DTH bill by TRAI. This, as described by the TRAI themselves, is a “ rental charge of the TV connection to your home.” What really was the need to add this rental component, remains a mystery. No cable TV or DTH operator over the years has demanded any sort of rental over and above the package subscription fees (and more affordable than what awaits us, mind you), which makes this addition all the more perplexing. Incidentally, the more channels you subscribe to, the higher the rental. The way this works is that you pay Rs130 as rental for the first 100 channels in your subscription, which could be pay or free-to-air channels, bouquets or pretty much any combination. Post that, you pay Rs20 additionally for every 25 channels that you add to your subscription.
TRAI says that you shouldn’t burden your subscription with what TRAI Chairman RS Sharma calls “channel hoarding”. If you are as perplexed about this terminology as we are, then perhaps his statement to the PTI might clear things out for you (or it might not, mind you), “Many a times, people buy goods they don't need today but think they will need tomorrow. Tomorrow, if they want to watch a channel they can buy it… why should they hoard the channel because it is a costly hoarding as they have to pay for it too.” If “hoarding” really was TRAI’s worry, they could have simply asked DTH companies such as Tata Sky, Airtel Digital TV and dish TV as well as cable companies including Hathway and DEN to offer each channel as ala-carte too—with consumers getting the simple option of carrying on with their existing channel packs and subscription (albeit as per the new pricing ceiling for broadcasters) or switching to the ala-carte packs. But why force everyone to change?
The TRAI has also not given clarity on if there can be long duration packs once the new tariff guidelines come into effect. As of this moment, DTH and cable operators are insisting that users shift to new tariffs that are going to be charged monthly. Going by the past trend, longer duration packs, which we would normally pay in one go for a 3-month, 6-month or 1-year subscription in advance, usually came with some discount or the other, which reduced the financial burden on consumers.
While we must appreciate TRAI’s exercise of rejigging the tariffs to make TV subscriptions more affordable, it could surely have done a lot better by perhaps doing a bit lesser. As the old adage goes—if it isn’t broken, don’t fix it. TRAI could perhaps have started out by setting an upper limit on the channel prices which broadcasters fix for their portfolio of channels, made it mandatory for them to offer each channel as an ala-carte option and introduced guidelines about broadcaster bundles.
However, TRAI have probably gone a couple of steps ahead, and is now not only dictating the pricing of each channel package, but also in many ways uprooting the deals DTH and cable companies would have done with broadcasters. Those deals meant lesser prices than we will now have to pay, as we illustrated in our detailed comparison. By doing this, the TRAI is altering multiple layers in that chain, perhaps unnecessarily. That has meant that your TV subscription is going up, or you will end up subscribing to a lesser number of channels that you are used to. We really don’t understand the need for completely tearing apart the current subscription packages, which could have done with regulation such as a price ceiling. That too, when many questions remain unanswered.
