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HomeNewsNational NewsFICCI-EY Report: NTO 2.0 to have massive effect on TV broadcasting revenues
Monday, 30 March 2020 12:40

FICCI-EY Report: NTO 2.0 to have massive effect on TV broadcasting revenues

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According to FICCI-EY 2020 report, the Telecom Regulatory Authority of India‘s (TRAI) new tariff order (NTO) 2.0 could have an impact of Rs 1500 to Rs 2000 crore on TV segment revenues in the event that demand does not increase. The NTO is currently sub-judice.

“Applying a cap on the discounting of prices could result in the closure of weaker and niche channels and consequent loss of jobs. It further stated that reducing prices of channels that can form part of a bouquet could bring down end-customer bouquet prices and increase choice,” the report said.

Also, the reduction of network capacity fee (NCF) in multiple TV homes is something that has already been implemented by some DPOs, though it can impact revenues by Rs 500 crore, as per EY estimate. However, it added that reduction in multiple TV NCF, bouquet prices, and longterm package discounts can bring back some of the lost TV subscriptions

The report say that the ceiling price of a pay channel for inclusion in the bouquet has been reduced from Rs 19 to Rs 12. The number of bouquets of pay channels not to be more than the number of pay channels offered by a broadcaster.

The FICCI-EY report also estimated that active paid subscriptions reduced by 26 million in 2019. Total subscription paid for television in India by viewers increased by 7.5% in 2019, despite a fall in

active paid subscriptions, on account of higher ARPUs. It expects the subscription base for traditional unidirectional television services (cable, DTH, HITS) to keep growing as penetration levels increase over the next few years.

As per report, the strict implementation of the NTO 2.0 could result in an up to 4% fall in subscription income at end-customer prices in 2020; however, there would be a marginal growth of up to 2% in the event that bouquet size, pricing and channel mix change.

The report, on the reduction in paid subscriptions, said that Households with multiple television connections, which used to benefit from much lower rates for the second and third television sets, rationalised their subscriptions as the NCF was charged at full rates for their additional television sets. It estimates that this could have impacted up to three million connections.

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