The new arrangement does not seem to be working cost-wise
Delhi-based Ashish Chugh, 51, recently took to microblogging site Twitter to express his disappointment with the increasing cost of watching television, ever since the Telecom Regulatory Authority of India’s (Trai) new channel pricing regulations have been implemented. The tweet garnered a lot of attention from other consumers who had similar complaints.
Effective 1 February 2019, Trai mandated that every channel should either be listed as free-to-air (FTA) or have a fixed maximum retail price across all platforms. Every subscriber pays a flat Rs 130 plus taxes as network capacity fee—the charge paid for the first 100 channels—every month. The 26 Doordarshan channels are FTA and will be broadcasted mandatorily. Note that you pay an additional Rs 20 for every 25 channels you add beyond the 100 channels and each HD channel takes spectrum capacity worth two SD channels.
But this new arrangement does not seem to be working cost-wise. “My cost has gone up by close to a 100 per cent,” said Chugh, who has four television sets in his house.
Before Trai’s new guidelines, Chugh had a DTH pack that had all channels. The basic plan cost him about Rs 9,000 a year and for the other three set-top boxes, he had to pay Rs 250 each every month or Rs 9,000 annually. After February, the cost increased to Rs 400 for the three extra connections. But from May onwards, all four connections were charged at Rs 750 each, which has spiked his total bill to Rs 3,000 a month.
Less for more
Mint in February analysed whether the regulation would actually reduce the cost and we found two scenarios. In the first, prices would go down for a single person or a two-member household who have one set-top box and don’t opt for too many channels over the FTA threshold. Second, someone who prefers different kinds of content, TV expense would most likely go up. Global analytics company Crisil also expected prices to increase by 25 per cent for most TV subscribers.
The first scenario is doable but only if you give up most of the channels that were available to you before the Trai regulation came into force. In fact, most families are getting less number of channels for the same amount of money they were spending earlier. Bengaluru-based Prarthana Singh, 22, used to pay Rs 295, including taxes, earlier. “Now I am shelling out as much as Rs 425 but I’ve lost about 40-45 channels I had earlier,” said Singh.
After the regulation came into force, broadcasters such as Star, Sony and Zee came up with bouquets of their channels, while distributors such as Tata Sky, Airtel Digital and Dish TV introduced bouquets comprising of channels across broadcasters. Trai has capped the price at Rs 19 for each channel given in a bouquet. However, bouquets may not always be a cheaper option. For Raman Pathak, 26, TV expense has increased from Rs 1,500 to over Rs 3,000 though he has opted for bouquets offered by various broadcasters. And the minute you choose the second scenario, where you opt for a variety of channels, your costs will soar. That’s what has happened in Chugh’s case, whose TV viewing costs have doubled now.
Sunil Kumar, secretary of the Telangana Cable Operators Federation said consumers want the old system back as the new regulation has increased tariffs. “Earlier, people used to pay Rs 200-250 and now the average price is Rs 350. It’s Rs 155 only if you go for the basic plan which gives you 100 FTA channels. In some cases, for people who have opted for more channels or high-definition channels, the bill has gone up to Rs 1,000,” said Kumar. “We’ve been complaining about the increase in prices and now even Trai has accepted it but no new changes have been proposed to deal with this.” Kumar said they’ve lost 40 per cent connections after this regulation came into force.
Regulator’s Take
When Mint reached out to Trai to understand the motive behind the new regulation and why consumers are complaining about paying more than what they used to pay earlier, Trai’s secretary S.K. Gupta said there were a lot of problems in the earlier system. “Broadcasters were not able to produce good-quality content because they didn’t have the flexibility to price channels,” said Gupta. Issues with respect to taxation too pushed Trai to bring the new rules. “There was no clear understanding on what channels were being offered at what price. The government was losing revenue due to inadequate transparency on the taxation front,” said Gupta.
However, the intention was not to increase the cost burden on the consumers. According to numbers received by Trai, only 20-30 per cent households have exercised their options. The ones who didn’t do so have been put on a default plan by their cable or DTH provider, according to their previous pack, in which case the price may have gone up substantially.
Gupta said there is an issue of consumer awareness. Some distributors were charging customers even for FTA channels because of lack of transparency, he added.
Consumers should be selecting only what they watch. “The issue is about how much you can watch. If you look at BARC data, 90 per cent consumers watch not more than 40-50 channels. Even if you’ve had 200 channels, you wouldn’t view them all,” said Gupta. According to data collected by Trai, for people who’ve selected only the channels they actually watch, the cost has dropped by 10-15 per cent.
What should you do?
Consumers now also have the option of adding or removing one or more channels on the go. Therefore, don’t select the channels you don’t view regularly. If there’s a particular period during which you require a channel, you may add that to your list and delete it later. Note that you are billed on a day-to-day basis; so you will be billed for a channel only for the number of days you’ve added it to your pack.
Now for households with multiple television sets, Gupta said it actually qualifies for three different connections. “Earlier because of non-transparency in the system, there were special concessions being given to consumers with multiple connections,” said Gupta. Prices for such consumers may have spiked now and Trai said they’re working on this. However, it is advisable to select the channels viewed on all the TV sets separately as the type of content watched in each room will vary according to the age group. “If you want the same channels as earlier, then yes, prices have gone up. Otherwise it would depend on an individual. Earlier I had eight movie channels at one price but do I really need all eight of them? Today I have to make the choice if I want to keep my cost the same as before,” said Jehil Thakkar, partner, Deloitte India, a consultancy firm.
If you’ve seen a hike in your TV bills too, spend some time running a cost comparison exercise. This applies to households with multiple TV sets too. Many people now consume content online on OTT (over-the-top) platforms such as Hotstar and Amazon Prime, and this has reduced the time we spend watching television. Thus, it only makes sense to pay for the channels you really need.
