Regulatory micromanagement has made Pay TV uncompetitive: DTH Association

DTH Association, the apex body of private direct-to-home (DTH) operators, has asked the Telecom Regulatory Authority of India (TRAI) to adopt price forbearance as regulatory micromanagement has stagnated the growth of the Pay TV industry. The association also stated that the sector has become uncompetitive against DD Free Dish and OTT platforms due to discriminatory policies.

In its response to TRAI's consultation paper titled ′Issue related to New Regulatory Framework for Broadcasting and Cable services', the DTH Association stated that the current New Tariff Order (NTO) framework laid down by TRAI has restricted the growth of operators while forcing customers to pay more for TV channels.

It added that the authority should revert to the pre-NTO policy of allowing the distribution platform operators (DPOs) to price and package their own plans/bouquets without any restrictions in order to meet the demands of the subscribers.

The DTH Association also stated that DD Free Dish and OTT are unregulated while the Department of Telecom (DoT) is planning to waive licence fees for IPTV players. "With DD Free Dish and OTT not being regulated by TRAI, traditional distribution platforms have become uncompetitive in their price offering to subscribers. DoT is also proposing to waive off license fees from IPTV," the association submitted.

It asked the regulator to either regulate pricing for Pay TV, DD Free Dish, and OTT or maintain forbearance for all three. "Broadcasters offer their pay channels free of cost to DD Free Dish and either free or at much lower rates to OTT platforms, while the same channels are given at much higher, TRAI notified rates to Pay TV platforms. This results in discrimination for subscribers and makes Pay TV platforms uncompetitive as against DD Free Dish and OTT platforms," it added.

It pointed out that the subscriber base of DTH has fallen from 70.99 million to 68.89 million in the last one year while that of MSOs/HITS operators having more than 1 million subscribers, has decreased from 47.58 million to 45.55 million.

"In this hyper-competitive industry, we request for price forbearance for DPOs as that would be best for the subscribers and the industry. Forbearance would also allow DPOs to price packages keeping in mind the paying capacity of the subscribers which they know best due to their proximity to the customer versus the broadcasters," it averred.

While stating that the regulator does not need to be prescriptive, the association argued that the market forces would rationalise the prices which are making mass market subscribers suffer and forcing them to migrate to other unregulated platforms.

On the TRAI's prescription of a 35% distribution fee (20% fixed and 15% variable), the association that the margin is too lopsided and discretionary and is the root cause of negotiations, disputes, and litigation in a very straightforward content owner/content distributor relationship. "Moreover, the margin needs to be applicable on both a la carte and broadcaster packs as the same amount of effort goes into enabling the two, on the part of the DPO," it said.

The DTH Association has also urged the TRAI to allow an annual inflation-linked increment mechanism for Network Capacity Fee (NCF). It also wants price ceilings on Multi TV pricing to be removed as Multiple TVs are owned by affluent consumers.

The DTH operators also want licence fee to be applicable to all the DPOs. "We request to remove the discriminatory license fee treatment being meted out to the DTH Industry and provide a level playing field by either waiving off the License Fee from DTH or making the same License Fee applicable to Cable, HITS, IPTV, and OTT," the association contended.