TRAI muddles channel pricing

There is continuing confusion over the implementation of the Telecom Regulatory Authority of India (TRAI) directive on the new channel pricing regime and subscription tariffs to be charged by cable TV operators and direct-to-home (DTH) service providers. The deadline for switching to the new regime, which had been set for February 1, has now been extended to March 31. There have been extensions in the past also. TRAI has claimed that the new regime would give consumers the freedom to choose the channels they want to watch and pay only for those channels. The maximum price for pay channels was fixed and that was to bring about greater transparency. Each channel was to be available on an a la carte basis. Other provisions also seemed to give more power to the consumers and to ensure that they were not made to pay for combinations of free and pay channels decided by distributors and broadcasters as bouquets.

But the extension of the deadline and some new guidelines issued with it may have given the power to shift subscription packages to operators and service providers. TRAI has said that the extension was meant to give subscribers who have not exercised their option the chance to do so. But there is confusion over this. After the February 1 deadline, TRAI had to clarify its guidelines on many issues like the network capacity fees charged with each subscription, how connections with multiple televisions will be charged and how subscriptions paid by users for long-term packs will be adjusted. It is implied that the operator or the service provider has the right to switch the consumers to a new plan according to their current subscription, but the consumers will have the right to change this before the end of March. This is again confusing.

Basically, the promise of freedom of choice and cheaper prices has not been realised. TRAI says that 65 million cable TV users out of a total of 100 million connections and 25 million DTH consumers out of 70 million have shifted to the new regime. But a large number of those who have shifted have not exercised the freedom for various reasons. TRAI has said that the new system would lead to at least 15% reduction in monthly subscriptions. But in most cases, this has not happened. Research firm Crisil has reported that in many cases, the subscription rates will go up by 25%. TRAI has denied this and claimed that the prices will fall further in the next three months. It is unfortunate that such a plan, which affects millions of consumers, is implemented in such a muddled way.