New Analog Pay TV Tariffs have been declared for 2015. Coming just 12 months before the Analog Sunset, the revised rates could spur networks to migrate early to digital. In effect the TRAI has adhered to its earlier methodology even after the Supreme Court .......
Cable TV headends through out the country are now seriously considering the addition of digital CATV channels. Besides the advantages of better picture clarity and multi channel sound as well as the potential to deliver HDTV.....
TRAI FIXES NEW ANALOG PAY TARIFFS
The TRAI Has Declared The New Max Prices For Analog Pay TV Tariffs (For DAS-3 & 4 Areas)
On October 1, 2014, the TRAI first declared its Tariff Order that set a ceiling on the Wholesale (Broadcaster to Headends) and Retail (Cable Networks to Consumers) Pay TV rates. The rates were uniformly applicable countrywide.
The TRAI also declared that these rates will be revised from time-to-time, as necessary. The rates were revised each year on Jan 1, 2005, 2006 & 2009, exactly by the annual inflation index declared by the government.
Broadcasters challenged the TRAI's tariff order in the Supreme Court, and since the matter was sub judice, no tariff hike orders were issued by the TRAI till March 2014.
SUPREME COURT DIRECTIVE
On 28th Feb 2014, the Supreme Court permitted the TRAI to adjust the tariffs for inflation.
In its 31 March 2014 Tariff Order, the TRAI allowed an inflation linked increase of 27.5%, for both the Wholesale (Broadcaster to Headend) and retail (Cable network to consumer) tariffs.
This large hike was to be implemented in 2 installments:
♣ 15% effective 1st April 2014 &
♣ The Balance from 1 Jan 2015.10.87%
NEW SC ORDER
In the meanwhile, in the tariff case TRAI vs SET Discovery for non-CAS areas, the Supreme Court ordered no change till end 2014, but that the TRAI should reconsider the tariff hikes after re-studying the entire situation.
Accordingly, the TRAI undertook a series of Open House Discussions and has formulated the current tariff order for non-CAS areas. The purpose of the present Tariff Order is to allow the remaining part of the inflation linked hike.
31 DEC 2014 ORDER
The revised retail tariff ceilings have been worked out to adjust for the balance hike, and declared as the "The Telecommunication (Broadcasting & Cable) Services (Second) Tariff (Thirteenth Amendment) Order, 2014, dated 31st December 2014."
Since the Supreme Court asked the TRAI to reconsider tariffs with a complete fresh look, the TRAI short listed the following methodologies for regulation of retail tariff:
(i) Cost Plus or
(ii) Consultative Approach or
(iii) Affordability linked or
(iv) Any other method/approach.
In its report submitted to the Supreme Court, after examining various methodologies, for determining the 'Wholesale Tariff' the TRAI concluded that 'cost plus' and 'consultative approach' are not suitable for adoption in the Indian analog cable TV market.
The TRAI has concluded that a retail price ceiling - at a reasonable level - that balances consumer interest with the growth potential of the industry - is warranted in the case of cable TV services in non-addressable markets in India.
In essence, this is exactly the same basis on which the TRAI had fixed Non addressable Cable TV tariffs, a decade ago in 2004.
Hence, even after the Supreme Courts 13.05.2009, order directing TRAI to consider the matter 'de novo' reviewing all aspects of the situation, the TRAI has concluded that its original methodology was correct and should continue.
NEW RETAIL TARIFFS
The revised Retail Tariff ceilings, for what Cable Networks can charge their customers from 1st January 2015, in Non-CAS areas is:
♦ ` 117 per month
For Atleast 30 FTA channels (Basic Package)
♦ ` 234 per month
For Basic Package + up to 20 Pay Channels
♦ ` 292 per month
For Basic Package + more than 20 Pay Channels
These rates will apply uniformly countrywide where analog Pay TV is permitted, ie in DAS Phase 3 & 4, upto 31st December 2015.
NO CONCESSIONS FOR POOR
Over the years there has been a demand that the poorer sections of society be provided Cable TV services at lower rates than the rich and affluent.
Infact for decades, Local cable Owners (LCOs) have provided cable TV services in slums and low income areas, at lower rates, even within the same geographical area.
The TRAI considered categorising each state within 3 levels of affordability / affluence.
However, the tier-wise ceilings will still not be able to account for variations among States within a tier or among cities within States. Additionally, it would require more detailed communication than a single all-India tariff as consumers would need to be informed as to which tier they fall into and what the applicable tariff ceiling for that tier is.
In view of the above, the TRAI has fixed a single Pay TV Tariff, for all analog Cable TV networks in the country.
Wholesale Pay TV channel tariffs refer to what each Pay Channel (broadcaster) can charge the Cable TV Headend.
The 1st January 2015 Tariff order dictates that, at the wholesale level, price ceilings are to continue, subject to the inflationary adjustments allowed, from time to time.
FINAL NON CAS TARIFFS ?
The Telecommunication (Broadcasting & Cable) Services (Second) Tariff (Thirteenth Amendment) Order, 2014, dated 31st December 2014, is probably the TRAI's last Tariff Order for Analog Pay TV. if the DAS Phases 3 & 4 deadlines are maintained, there will be no Analog Cable Pay TV in India from 1st January 2016.