Trai mulls new consultation paper on capping of TV channel bouquet discounts

Telecom Regulatory Authority of India (Trai) is considering bringing out a new consultation paper for addressing tariff issues that cropped up in the broadcasting sector after the implementation of a tariff framework on February 1.

Trai and the industry are engaged in a legal tussle over capping of discounts for TV channel bouquets which was set at 15% by the regulator.

"There is a distortion between the prices of ala-carte and bouquet offerings by broadcasters. We had capped the discounts at 15% on TV channel bouquets, which was rejected by Madras High Court and now is pending in the Supreme Court," a senior Trai official told DNA Money.

The petition will be listed afresh in July, the official said.

The whole legal process is delaying the proper implementation of the new framework. "We are internally deliberating the pros and cons of issuing a fresh consultation paper on capping of discounts or wait for the legal process to take its own course," the official said.

A final decision will be taken by June-end.

Through TV channel bouquets, the broadcasters are forcing consumers to watch channels which they don't want, but since the prices of channels are low compared to ala-carte, many users are opting for bouquets. At present, the discounts on TV channels bouquets are more than 15%, against the Trai rules. For broadcasters, the higher the number of their channels go into homes, the higher would be the reach translating into higher advertisement revenues.

Trai had appealed in the Supreme Court to reverse the Madras High Court order that had rejected the clause in its tariff rules that capped the discounts offered by broadcasters on bouquets to 15%.

The new framework gave cable TV and DTH users an option to pay for what they want. If a user just wants to watch free-to-air channels – around 100 – he/she will have to pay Rs 130 plus taxes. According to estimates, there are 100 million cable TV homes and 67 million DTH homes in India.

Since then, there have been many glitches being faced by consumers and industry, apart from complaints of increase in their TV bills. But Trai stepped every now and then to resolve issues at the earliest.

According to Trai's internal assessment, there has been no price increase in the majority of cases. "Barring one broadcasting platform where there is an average 8% increase, there has been price reduction of around 2-3% across all platforms and in one platform, we have seen prices gone down by 9%," another official from Trai said.

There is a perception that has been created on the price increase, it's just that now in the same price consumers are watching channels of their choice, which is less in number. The objective was to improve the quality of content and promote competition through the new framework, the official said.

Some in the industry had raised concerns that the earlier Trai's tariff order was likely to create some problems for the short-term growth.