Trai’s New Tariff Regulations Will See Profitability of DTH Operators Going Down Ind-Ra says that there will be multiple challenges faced by multiple system operators (MSOs), local cable operators (LCOs) and DTH operators while implementing the changes to tariff regime. Even though there are challenges involves, Ind-Ra believes that the tariff order is likely to de-risk the business model of MSOs and LCOs as their revenue stream will contain fixed network capacity charge (NCC) from subscribers and content commission from broadcasters (BC), thereby effectively passing through content cost. DTH operators, on the other hand, will likely see their “profitability being impacted in the next six to twelve months since they have already sold long-term plans till the end of 2018 and DTH companies won’t be allowed to withdraw or reprice a plan that’s already in use plan.” After the removal of 15% discount on bouquet price versus à la carte channel pricing by Trai, broadcasters started providing a bouquet of channels at 20%-60% discount to the a-la-carte channel pricing, probably to avoid any hike in final consumer price. Trai Warns Broadcasters to Reduce the Count of Bouquet Packs In the consultation paper, Trai has warned all the broadcasters to reduce the number of Bouquet packs offered by them to the subscribers. Ind-Ra believes that broadcasters’ business model will change from B2B to B2C as they will now have to market their channel packs to end rather than rely on the service providers. “Broadcasters with a strong set of anchor channels across genres will benefit, as they will be able to create a comprehensive bundled offering and generate customer pull,” said Ind-Ra. Trai Consultation Paper Focused on Making Tariff Regime More User-Friendly Furthermore, Ind-Ra says that the new Trai’s consultation paper issued on August 16, 2019, is focused on making the existing order more end-user friendly. But the research firm raised some concerns as well. Ind-Ra believes that certain aspects in the consultation paper such as reinstating cap on discount provided on bouquet pricing, moderating/regulating the number of bouquets, as well as number of channels, may face operational and legal challenges during execution. Allowing a fixed discount on total prices of selected à la carte channels would empower end-customers to choose their preferred channels (even across broadcasters) and also reduce their monthly payouts, opines Ind-Ra.
