In-Depth: Does The Consumer Really Have A Choice In TRAI’s New Tariff Regime?

The Telecom Regulatory Authority of India (TRAI) has been stressing the fact that the new tariff/interconnect regime is for the convenience of consumers and that it allows people to choose channels they wish to view every month.

But is the new framework really a convenience or a major headache for the consumer? In the old regime, the cable operators would offer around 500 channels at a monthly cost of Rs 270. Now with the new framework, the consumer is restricted to a certain number of channels.

For instance, if the consumer chooses only Sony Pictures Network’s pack for a month then he can watch only the channels offered by the network. But to watch channels offered by Viacom18, Star India or Zee Entertainment Enterprise Limited, the Sony subscriber would have to additionally select their packs.

In such a case, how much value does the new framework have?

According to a leading broadcaster, the new framework is not very apt as in the new avatar though the broadcaster can manage the dynamic nature of the subscription, the reach of the long tail will suffer.

“Now the fundamental difference is that TRAI believes everyone watches around 39 channels but the problem is two-fold — an individual can watch eight to 10 channels but as a household that has five people, they would want 50 channels. Kids will want different channels and father will opt for something different. In the end, the family will have to take care of all the demands,” the broadcaster said.

The situation is even worse in the case of movie channels as the consumer pays attention to the movie and doesn’t really care on which channel it is being aired. If a consumer opts for Sony Pictures Network, then he/she will be restricted only to the movies aired on Set Max or Set Max 2. For a 24×7 movie channel, it won’t be practical to air new films all the time and as a result, there will be repeats. The consumer will be restricted to watching repeats for a month as he won’t have the option to surf movie channels offered by other major networks unless he has subscribed to them.

“The way our business work is, if I ask a consumer do you watch movie channels, he/she will say yes. But if I ask how many movie channels, the answer will be one because a consumer doesn’t watch a movie channel, he watches a movie. Now if a consumer selects one movie channel, he won’t have the option of surfing and at the end of the month, it will be like we have seen all the movies. So, there is a fundamental disconnect in how we see the business and how TRAI sees the business,” a broadcaster said.

While the new framework is said to be affordable for the consumer, the channel pricing offered by broadcasters say otherwise. Unlike earlier where consumers were receiving bulk channels for a standard amount of Rs 270, with the new regime the consumer has to commit to the complicated process of choosing channels and paying accordingly.

The consumer will have to pay Rs 130 + taxes for the primary set of 100 channels comprising Doordarshan and FTA channels. In order to have popular channels, the consumer has to pay extra Rs 20 after the addition of 25 channels. Now, the consumers who are well-versed with the networks and channels will go through the whole process whereas the non-tech savvy customers are likely to simply rely on the cable operators to offer them packages.

According to an industry expert, it is important to look into what MSOs and LCOs are offering as they are the ones who will be interacting with the consumer. “Consumer will get confused if they go by what Zee or Star or any other broadcaster is promoting. Consumer pack is a different pack, as when he will talk to the LCOs, he won’t be talking about the Rs 49 pack of a particular broadcaster. If you look into the packs released by Den, Hathway or Siti, those are the consumer packs that the LCOs will be selling to consumers.”

Agreeing to this argument, a leading broadcaster said that the right way to evaluate this regime is by looking at the packs offered by DPOs like Den or Siti. “These packs will sell because ultimately what the last-mile cable operator sells in Meerut is what sells. It is the cable operators and DPOs who will be approaching consumer in every household. Now, the way to look at it is, earlier consumers used to get all the channels for Rs 270 but now he will get only two packs. So, someone who used to get all channels of Star, Sony and Zee will get or have to choose one or more pack for that amount and has to give up on something,” the broadcaster said.

According to an expert, the new regime has only succeeded in bringing transparency in the whole distribution system. In an earlier regime, there was a fixed fee and as a result, the rich were subsidizing the poor. But in the new regime, everything is completely transparent, there is no discrimination.

“Earlier, if a consumer in Mumbai was paying Rs 350 and getting the same content, a consumer in Amravati was getting the same content for Rs 200. The broadcaster wasn’t getting affected because they had a lump sum deal with everybody. Even with Tata Sky and Airtel packaging, they did a fixed fee deal and then gave packages in different packs depending on their understanding. Earlier, everyone was taken care of from the broadcast side. Now in the new regime everything is completely transparent, there is no discrimination, poor will have to pay more and the rich will continue to pay whatever is needed,” the broadcaster said.―Best Media Info