Companies & Sectors
TRAI’s draft tariff order beneficial only after complete digitisation in broadcasting: Report
The Telecom Regulatory Authority of India (TRAI) has issued a draft order for content pricing and negotiations in broadcasting sector. This includes a proposal to allow households to pay Rs130 as monthly rental per set top box for 100 standard definition channels that are being offered to them on TV. While this move would help customers, full digitisation in the broadcasting sector holds the key to benefits to all players, says a research note. 
 
In the report, ICICI Securities Ltd says, "The distribution network model recommended by TRAI is clearly the ideal model and will pass on power to the hands of consumer. It is a departure from the current regime where bouquets determined by broadcasters are sold to DPOs at heavily discounted rates making the proposition of a-la-carte selection impossible or uneconomical for the consumer. Broadcasters were able to push complete bouquets as contracts were largely at fixed-fee basis. However, the lack of transition to subscriber also owed to lack of audited subscriber numbers even in phases-1 & 2 markets. We believe integrated distribution network model can be implemented only when there is digitisation in its true form and complete transparency in subscriber numbers of distribution platform operators (DPOs). With phase-3 digitisation mandate stuck in the courts, we believe phase-4 might get meaningfully delayed by two to three years, hence also the application of the new tariff order."
 
"The order (from TRAI) goes a long way in democratising content viewing by placing strength in the hands of consumers for package and channel selection. However, for the distribution network model to succeed, TRAI has assumed that phase-4 digitisation will be complete by December 2016 and the tariff order will be applicable from April 2017. We believe digitisation as of now is far from reality and actual digitisation might be at least two to three years away in terms of deployment, putting a question mark on the applicability of the new tariff order."
 
"In addition," the report says, "the order has not made any reference to carriage fee and continuation of an unregulated carriage regime can annul the implications of the order. We believe that the order will finally lead to higher average revenues per user (ARPUs) as consumers select content based on their ability to pay and should benefit broadcasters too in the long run. We however anticipate much resistance from broadcasters for the application of this tariff order without digitisation in phases-3 & 4 markets".
 
What, according to ICICI Securities, is surprising in this draft tariff order (issued by TRAI) is there is no mention of regulating carriage fee and ensuring that there is no discriminatory carriage fee payment. "Not regulating carriage fee will annul the implications of the order as broadcasters can incentivise bouquet selection by DPOs by providing attractive carriage fee. The consultation paper on the tariff order (issued on 29 January 2016) had extensively discussed carriage fee and the need to regulate it," the report added.
 
With TRAI's draft tariff order broadcasters would lose power while distributors stand to gain, the report says, adding, "With this order, we expect broadcasters’ ability to push bouquets to be challenged and big networks will fail to yield the power of negotiation and push through niche channels. Distributors stand to gain with the power of packaging and now are no longer worried of the high reference interconnect order (RIO) rates of channels as broadcasters can provide maximum incentive of 15%. Direct-to-Home (DTH) stand to benefit as compared to National MSOs as content costs normalise; however, regionally strong multi system operators (MSOs) will be able at gain from cheaper content."
 
According to its new draft tariff order, broadcasters should also declare the maximum retail price (MRP) on channels being offered on an a la carte basis for their subscribers. TRAI has also proposed a genre-wise ceiling on channel prices.
 
With this new model, DPOs will be able to charge rental amount of Rs130 for carrying 100 channels and will get Rs20 more for each block of 25 channels. Post April 2017, the DPOs will continue to collect, account and consolidate the amount from customers as it is being done currently, for which they would get 20% commission on content.
 
The order has introduced an MRP model of pricing where broadcasters are given the freedom to price their MRP based on the genre of the channels. All channels are classified into seven genres and pricing caps are recommended for each (see table below). Broadcasters are allowed to form bouquets but the price of bouquet cannot be less than 85% of the channel’s ala carte price sum. 
 
 
"Broadcasters in the current regime are able to give very attractive bouquets priced at 10-20% of RIO rates making it impossible for DPOs to opt for ala-carte channels. Broadcasters under the new regime will find it very difficult to convince DPOs to carry mid-tier channels (e.g. Life OK, &TV) in base packs. In order to maintain reach, broadcasters might also be forced to convert many channels to become Free to Air (FTA)," the report says.
 
With the new draft tariff order consumers would get a lot of choices, which eventually lead to higher ARPUs. Consumers will now have complete information on channels pricing and clear segregation of pay and free-to-air (FTA) channels. This will ensure that consumers will be able to pay for what they watch. Consumers will now be able to dynamically select channels.
 
At present, Indian consumers are spoilt for content choices, as even in the base pack it is very high. This is because broadcasters have been competing to get maximum reach for their channels and pushing their content to base packs across DPOs. "While many channels in the new regime will convert to FTA, consumers will now also have to limit what they want to subscribe. Eventually, we believe consumers based on their content requirements and ability to spend will end up spending more on content," the report from ICICI Securities says.
 
Talking about pay TVs, ICICI Securities feel that content stickiness would drive their revenues. It says, "Leadership channels with top-three positions will only be able to garner places in customer packages. Mid-tier channels in each genre will not be able to survive in a-al-carte regime and will be forced to become free to air. We expect reach of channels placed on a-la-carte to be severely impacted. Genre leaders in GEC, regional, sports and movies will be able to maintain their position."

 

User

Won't screen films with Pakistani artistes, say cinema owners
The Cinema Owners and Exhibitors Association of India (COEAI) on Friday announced that movies featuring Pakistani actors won't be screened in theatres in the country.
 
The decision comes ahead of the scheduled release of Karan Johar's "Ae Dil Hai Mushkil", which stars Pakistani actor Fawad Khan. 
 
While it was slated to hit the screens on October 28, the COEAI decision has cast doubts if it will see the light of the day any time soon. 
 
COEAI President Nitin Datar said after a meeting of members: "It was decided that keeping in mind the patriotic feelings and national interest, we have requested all member exhibitors to refrain from screening movies which have involvement of any Pakistani artiste, technician, director or music director.
 
"We are also in the process of requesting other associations connected with the film industry to support the sentiments in the best interest of our nation," he added.
 
The decision comes amid India-Pakistan tensions following a terror attack which killed 19 Indian soldiers. The Indian Army then carried out surgical attacks on terrorist launch pads in Pakistani territory.
 
The Maharashtra Navnirman Sena had earlier warned Pakistani actors to quit India.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
  

 

User

COMMENTS

chandra2062

4 months ago

This decision of coeia should certainly be appreciated & many congratulations. Please don't bow down before the cowards & anti national forces like Karan Johar ,salman khan & Rahul Gandhi etc. our country .

Hacking threat from Pakistan kept spectrum auction team on toes
The bidding for telecom spectrum this year was protected with enhanced, multi-layered security measures as the chances of a hacking attempt after the Uri attacks were deemed very high, according to a top official of the company mandated to conduct the auction.
 
Without naming Pakistan, Vinaya Varma, CEO of mjunction, said the "threat perception was high this year from the western front".
 
He said as the auction was highly publicised, special care was taken to look at vulnerabilities. "The procedure was made extremely secured so that any attempt to hack would fail," Varma told IANS in an interview over phone from Kolkata.
 
"We had deployed various security procedures such as secure login, digital signature certificate, fixed internet protocol address for bidders and other procedures to make bidding foolproof and transparent," he said.
 
The company had also set up an infrastructure team to monitor any abnormal activity like intrusion or data filtering. The team ensured that all the links were working properly.
 
An e-marketplace, mjunction services limited, is a 50:50 venture promoted by SAIL and Tata Steel. It has won a three-year mandate from the government to conduct e-auction of spectrum. It conducted the first spectrum auction in 2015.
 
A total 2,354 MHz of spectrum was put on block for e-auctioning this year in seven bands -- 700 MHz, 800 MHz, 900 MHz, 1,800 MHz, 2,100 MHz, 2,300 MHz and 2,500 MHz.
 
The bidding was also made secure from snooping. The platform was designed to ensure that while auction was in progress, the identity details of bidders were hidden through database-level encryption. Neither the auction administrator nor the seller (Department of Telecommunications, DoT) had any access to bidders' bid details.
 
"The system allows access only to summary-level information of all bids made. Each bidder has access only to his own bidding history and also to summary-level information of all bids made. The platform provided separate dashboards for bidders and for DoT," he said.
 
The platform for bidding was the same as last year but the offerings this time were higher.
 
This year there were 126 offerings (seven bands multiplied by service areas) compared to 69 last year when the auction took in only four bands. The offerings started at the same time, ran and closed simultaneously. Before 2015, auctions were done in a sequential manner.
 
"Auctioning was done through Simultaneous Multiple Round Auction (SMRA), which is an internationally-recognised methodology for e-auctioning of spectrum. It is the most sophisticated methodology but also the most complicated. There are various permutations and combinations in spectrum allocation, which are in play in live bidding," Varma said.
 
Asked how difficult or smooth the process was, Varma said: "The tender document preparation, system design, the programming and the actual execution of the auction were all very complex activities."
 
Saying that mjunction works in close coordination with the government, Varma added that the Department of Electronics and Information Technology had spent weeks testing the auctioning platform before giving them the green light.
 
In 2015, when mjunction got the mandate, it took the company five months to design the platform. Because of the higher offerings this year, three more months were needed to customise it.
 
"We had set up a help desk with nine highly-trained people whom operators could call up for clarifications. We had also placed a domain expert in DoT."
 
He said this time the spectrum offered was in contiguous range. Also, the frequency assignment was done in such a way that the operator got contiguous bands.
 
"The algorithm was designed by mjunction. The DoT just had to press a button to allocate contiguous bands. Manually it would have been very difficult," Varma added.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

User

We are listening!

Solve the equation and enter in the Captcha field.
  Loading...
Close

To continue


Please
Sign Up or Sign In
with

Email
Close

To continue


Please
Sign Up or Sign In
with

Email

BUY NOW

The Scam
24 Year Of The Scam: The Perennial Bestseller, reads like a Thriller!
Moneylife Magazine
Fiercely independent and pro-consumer information on personal finance
Stockletters in 3 Flavours
Outstanding research that beats mutual funds year after year
MAS: Complete Online Financial Advisory
(Includes Moneylife Magazine and Lion Stockletter)