Regulatory micromanagement has made pay TV uncompetitive: DTH Association

The DTH Association, the umbrella body for private direct broadcast operators (DTH), has asked the Telecommunications Regulatory Authority of India (TRAI) to adopt a price forbearance, as regulatory micromanagement has stalled the growth of the pay-TV industry. The association also said the industry is no longer competitive against DD Free Dish and OTT platforms due to discriminatory policies.

In its response to TRAI’s consultation paper entitled “Issue related to the new regulatory framework for broadcasting and cable services”, the DTH Association stated that the current New Tariff Order (NTO) framework established by the TRAI has limited operator growth while forcing customers to pay more for TV channels.

He added that the authority should revert to the pre-NTO policy of allowing Distribution Platform Operators (DPOs) to price and package their own plans/bundles without any restrictions in order to meet subscriber demands.

The DTH Association also said that DD Free Dish and OTT are unregulated while the Department of Telecom (DoT) plans to scrap license fees for IPTV players. “With DD Free Dish and OTT unregulated by TRAI, traditional distribution platforms are no longer competitive in their price offer to subscribers. The DoT is also proposing to remove license fees from IPTV,” said the ‘association.

He asked the regulator to regulate prices for Pay-TV, DD Free Dish and OTT or maintain forbearance for all three. “Broadcasters offer their pay channels for free at DD Free Dish and either free or at much lower rates to OTT platforms, while the same channels are offered at much higher rates notified by TRAI to pay TV platforms. This results in discrimination for subscribers and makes pay TV platforms uncompetitive with DD Free Dish and OTT platforms,” he added.

He pointed out that DTH’s subscriber base has grown from 70.99 million to 68.89 million over the past year, while that of MSO/HITS operators with more than one million subscribers has grown from 47.58 million to 45.55 million.

“In this hyper-competitive industry, we are asking for price forbearance for DPOs because it would be better for subscribers and the industry. Forbearance would also allow DPOs to price packages with capacity in mind. of subscribers they know best because of their proximity to the customer versus the broadcasters,” he said.

While arguing that the regulator does not need to be prescriptive, the association argued that market forces would rationalize prices that hurt mass market subscribers and force them to migrate to other platforms not regulated.

On the TRAI prescription of a distribution commission of 35% (20% fixed and 15% variable), the association that the margin is too unbalanced and discretionary and causes negotiations, disputes and disputes in a very simple owner/content distributor relationship. “Additionally, the markup should be applicable to both pay-per-view packs and broadcasters, as the same effort goes into activating both, on the part of the DPO,” he said.

The DTH Association also urged the TRAI to allow an inflation-linked annual increment mechanism for the Network Capacity Charge (NCF). He also wants price caps on Multi TV prices to be removed, as Multi TVs are owned by affluent consumers.

DTH operators also want license fees to be applicable to all DPOs. “We call for removing the discriminatory license fee treatment applied to the DTH industry and providing a level playing field by removing DTH license fees or making the same license fees applicable to cable, HITS, IPTV and OTT” supported the association.

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