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HomeArticlesRegulationsTRAI Tariff Order – where are we heading?
Saturday, 20 July 2019 11:06

TRAI Tariff Order – where are we heading?

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On 15 May 2019, the Delhi High Court stayed Telecom Regulatory Authority of India’s order to direct-to-home (DTH) platforms on restoring old plans of long duration pack (LDP) subscribers and abstaining from moving them to the new tariff order which was introduced to empower consumers to have their own choices.

The petition was filed by the DTH platform Tata Sky, challenging TRAI’s 1 May 2019 directive. The other petitioners for this case are Sun Direct, Airtel Digital TV and broadcaster Discovery India Communication.

The court will hear this matter next on 11 July 2019.

Tata Sky said in its application: “The TRAI now by way of the Direction dated 01.05.2019 is attempting to once again upset this position and arbitrarily reverse provision of services to subscribers as per the old Agreements which are not in existence anymore."

Tata Sky said TRAI’s directive contradicted its new regulatory framework. Tata Sky asked for a stay on the 1 May direction on the grounds that DTH operators and consumers would endure irreparable loss if a stay was not granted. 

TRAI has been directed by the court to respond to the application. The application also highlighted the fact that migration of LDP subscribers to the new regime was conducted post the roll-out of the order.

The petitioner said following TRAI’s 12 February order, subscribers who did not choose new channels were moved to Best Fit Plans. Post the 1 May directive, the application argued, two tariff regimes are bound to come into play leading to major losses to distribution platform operators (DPOs).

 

TRAI hires audit agency:

Meanwhile on 6 May 2019, the regulator hired the state-owned Broadcast Engineering Consultants India Ltd (BECIL) for conducting audits to make sure that cable TV and DTH companies are following the tenets of new tariff order. 

TRAI Secretary S K Gupta said: "BECIL will be conducting the audit on behalf of TRAI to ensure compliance with the new regulatory framework. We request all distribution platform operators (DPOs) to ensure compliance with the new regulatory framework in letter and spirit. DTH and Cable TV operators will be randomly selected and audit will be conducted to see if they are in compliance with the new regulatory framework."

In April 2019, TRAI Chairman RS Sharma had said that TRAI plans to initiate "audit" of subscriber management and other IT systems of errant operators. Sharma had said consumer choice and consumer interest are "non-negotiable" and "cannot be compromised" and that companies not adhering to rules will have to face the consequences.

As per TRAI, the audit team will look at multiple aspects including subscriber management system and billing, and also determine whether consumers are indeed getting their choice of channels.

 

Stern notices to DPOs:

Recently, the regulator had sent notices to several DTH and cable TV platforms for violation of rules, as it observed that the players were forcing channels and package schemes to the consumers, and subscribers were not able to exercise their choice.

On 1 May, TRAI had asked DTH operators Tata Sky, Dish TV and Direct Sun TV and cable operator Independent TV to ensure smooth transition to the new packs by consumers, especially where long-term subscriptions were concerned.

 

The letter said:

“In case the broadcasting services related to television have been availed by a subscriber with a lock-in period or the charges for subscription of broadcasting services related to television are paid in advance for a specific period by a subscriber in pursuance of any scheme offered by the distributor of television channels, the distributor shall continue to provide such services for such period to the subscriber without any increase in the price of subscription and without altering the other terms of subscription to the disadvantage of the subscriber."

Many complaints were sent by consumers that DTH operators have migrated the long-term pack subscribers to the Best Fit Plan available on their platforms. TRAI has clarified that DTH operators are bound to provide services to long-term plan subscribers (including multi-TV subscribers) till the contracted period without any change unless the subscriber opts out of it or the validity of the long-term plan expires, whichever is earlier.

The regulator added that every distributor has to offer all channels available on its network to all subscribers on a-la-carte basis and declare distributor retail price per month, of each pay channel payable by a subscriber.“Provided that the distributor retail price, per month, payable by a subscriber to a distributor of television channels for subscribing to a pay channel shall, in no case, exceed the maximum retail price, per month, declared by the broadcasters for such pay channel."

Not only DTH, TRAI had also sent notice to Punjab based Ganapati Cable for violation of rules. Based on an inspection of the multi-system operator's office, TRAI observed unavailability of website and customer care channel in violation of the provisions of the QoS Regulations, 2017 notified by the TRAI.

The regulator has asked the MSO to adhere to the provisions of the quality of service regulations as well as report compliance as per the new regulatory framework.

 

Miseries continue: 

While the roll-out of TRAI’s new tariff order has resulted in a blackout of channels in several parts of the country, TRAI received several complaints about distribution platform operators (DPOs) not providing them their preferred channels and packs. 

 

OTT main gainer: 

Experts warned that the new regime will lead to increased content consumption on over-the-top (OTT) platforms, especially when it comes to sports. 

SPNI’s chief revenue officer and head, sports business, Rajesh Kaul said: “We have put all our live sports content behind a paywall on SonyLIV. That was done because of the TRAI order. So, the consumer will have to pay irrespective of whether the content gets consumed on SonyLIV or our linear channels. So we are fine with that.”

Commenting on the new order, MK Anand, MD and CEO, Times Network said: “TRAI’s new tariff order is a game changer for the industry. Although there are fluctuations in viewership, and hence, advertising revenue in the current quarter is affected, in the long run, it will be beneficial for the industry as the Average Revenue Per User (ARPU) increases and so does the subscription revenue.” 

Well, the new tariff order could be a game changer, provided it could have been implemented with greater foresight instead of narrow planned action such as demonetization. The effects are very visible as consumers are still confused and find themselves at the mercy of DTH operators that are gaining at the cost of LCOs. Let’s see where consumers would find themselves when the dust settles down?

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