Cable TV and DTH Bills Will Go Up for Most Users
The network capacity fee (NCF) and channel prices announced by broadcasters and distributors as per the Telecom Regulatory Authority of India's (TRAI's) new guidelines could increase the monthly bill of most subscribers of television channels, says a research report.
 
In the report CRISIL says the new regime, which came into effect on 1 February 2019, will benefit popular channels and hasten adoption of over-the-top (OTT or content providers who stream media over the Internet, such as Netflix and Hotstar) platforms, and will be a mixed bag for viewers and distributors.
 
"Our analysis of the impact of the regulations indicates a varied impact on monthly TV bills. Based on current pricing, the monthly TV bill can go up by 25% from Rs230-Rs240 to about Rs300 per month for viewers who opt for the top-10 channels, but will come down for those who opt up to top five channels," says Sachin Gupta, senior director, ratings at CRISIL.
 
CRISIL's analysis assumes a scenario where subscribers opt for the top-10 channels by viewership in addition to the free-to-air (FTA) ones. 
 
 
TRAI's new regulatory framework for broadcasting and cable services industry is intended to usher in transparency and uniformity, and will afford far greater freedom of choice to viewers. More than 90% of TV viewers flip 50 or fewer channels, and the new rules will let them subscribe to what they want and not be saddled with channels they are not interested in.
 
However, CRISIL feels that the new regime could drive consolidation in the broadcasting industry because content will clearly be the king and key differentiator. It says, "Subscription revenues of broadcasters would rise about 40% to Rs94 per subscriber per month compared with Rs60-Rs70 now. With viewers likely to opt for popular channels, large broadcasters will have greater pricing power. Conversely, broadcasters with less-popular channels will find it tough to piggyback on packages, and the least popular ones will hardly have a business case and could go off air." 
 
But these are early days and the situation may evolve with prices charged by broadcasters and distributors declining depending on market forces, viewership and competitive intensity.
 
Nitesh Jain, director, ratings at CRISIL says, “In all this, OTT platforms could emerge as the big beneficiary because many viewers could shift because of rising subscription bills. And low data tariffs also encourages viewership on OTT platforms.”
 
For distributors (DTH and cable operators), the ratings agency feels the new regulations are a mixed bag. "While content cost will become a pass-through, protecting them from fluctuations, they may lose out on the benefits of value-added services such as bundling content across broadcasters, customisation, and placement revenue," it adds.
 
Currently, most distributors are charging NCF at the cap rate of Rs130 per month. Similarly, broadcasters have priced subscription for the most popular pay channels at the cap rate of Rs19 per month.
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    COMMENTS

    A BANERJEE

    5 months ago

    It was a prophetic article. Congratulations. We are customers of DEN. The cost of viewing TV has indeed gone up almost double. On top of it, the TRAI authorities just do not care even to respond to the complaints mailed to the designated officer and the service provider clearly does not care about TRAI either. This is my sad experience.

    Guru Samy

    6 months ago

    Sudden hike TV of bill who will benefit from this Before the update enactment ,don't we have net work capacity fee i e Rs 130 +...? If i want to buy a product why should I pay these amount of tax

    Gordon Fernandes

    6 months ago

    Prices are going up of such essential services while financial & economic market s world over are imploding. Common man shall bear the brunt.

    vinod sharma p

    7 months ago

    Besides increasing the overall bill for DTH, citing this new regime, the DTH providers have made it so cumbersome to switch to the new system of a la carte and pushing new bundle packs instead.

    Surendra Babu Matavalam

    7 months ago

    I am planning to sell off my DTH and just watch the ones needed by streaming.

    B. KRISHNAN

    7 months ago

    Though new Trai regulations was meant to stop exploitation of the subscribers by offering boquets, even now the DTH poviders and Broadcasters are offering boquets. After chosing the boquets one has to go thru the laborious route of chosing channels not included in the boquet (including FTA channels). On the whole, one wishes that TRAI's regulations have created havoc to the consumer.

    B. KRISHNAN

    7 months ago

    DTH providers have , as expected, succeeded in gaming the new Trai regulations. They have made the very process of selecting channels very complex. After several frustrating attempts I have now settled for some channels and packages --end result is that I am paying more for less now!

    Gurudutt Mundkur

    7 months ago

    Most modernisation and rationalisation methods adopted have led to increased expenses for the layman. These are made compulsory and so he has no option.
    To give you another example ... dematerialisation of shares. When shares were held in a physical form and one did not buy or sell shares, there were no depository charges.
    Now even if I have no transactions, I have to pay depository charges every month.

    G.N.Kodnikar

    7 months ago

    Very tine article.i agree to it.

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  • Self-Redevelopment - The Future of Mumbai Real Estate?
    Redevelopment is a fact of life in any ageing, land-starved metropolitan city. In India, no city defines this dynamic quite as accurately as Mumbai.
     
    The conventional norm of redevelopment in India involves appointing developers to redevelop old and dilapidated housing projects. However, several housing societies in Mumbai are now contemplating self-redevelopment instead. We can dispense with the usual metaphor 'not as easy as it sounds' - this does not sound easy by any definition, and it is not.
     
    Broadly, some homeowner groups are now taking the route of appointing their own architects, contractors and project management consultants to execute the redevelopment of their projects. These can be single stand-alone buildings or housing societies of more than one building. For funding self-redevelopment, the owner collective will invariably opt for bank loans.
     
    Benefits of Self-Redevelopment
     
    For redevelopment by any means, homeowner groups are motivated by the prospect of larger, more secure homes with vastly improved facilities and amenities. The only reason why a developer would undertake redevelopment is obviously that he gets a massive stake in the whole undertaking.
     
    In self-redevelopment, on the other hand, the housing society members themselves reap the full benefits of the unused potential of the property, without stake dilution. Because of the elimination of stake dilution, the homes they get via self-redevelopment are also invariably much bigger than what they could hope for if a builder does it.
     
    Moreover, the homeowners have complete control over the quality of construction, the completion timeline, and enjoy more corpus funds because they retain the right to sell surplus homes generated in the redevelopment process. In fact, there is a lot of scope for such extra homes to be generated, thanks to Government intervention.
     
    Understanding that Mumbai is in critical need of all and any kinds of redevelopment, the local authority, Maharashtra Housing and Area Development Authority (MHADA) also encourages this new trend by actively granting approvals to self-redevelopment projects within two months, as against the previous four to five months. It also hiked the floor space index (FSI) of such properties under the MHADA purview from 2.5 to 3 in 2017. 
     
    Funding Self-Redevelopment
     
    With MHADA and the Maharashtra government promoting this concept, various banks and financial institutions are seeing the viability of lending to societies targeting self-redevelopment. For instance, Mumbai Central District Co-operative Bank has provided loans to nearly 30 societies so far, while MHADA - appointed as the supervising authority - can give single-window approval for self-redevelopment. Other banks like Thane District Cooperative Bank and Pune District Cooperative Bank have also consented to offer loans for self-redevelopment. 
     
    However, why go in for self-redevelopment when a developer with the right know-how and resources can get it done much faster and more efficiently? The key reason is simple - in the past, several housing societies in Mumbai entrusted the redevelopment of their projects to builders and were left in the lurch.
     
    The Murky Past of Redevelopment
     
    In many cases, they were cheated by builders in a variety of aspects. In others, the builder ran out of capital and left the whole undertaking in indefinite limbo. Meanwhile, the original owners incur huge rental expenses in alternate accommodations and are generally at the mercy of an outside party whose only objective is a massive profit margin. In the ongoing NBFC crisis and generalized funding crunch, this danger is currently exceptionally high.
     
    Exceptions Always Exist
     
    Nevertheless, the reason why homeowner bodies turned to developers in the first place is that there were many positive antecedents where everyone got what they had signed up for. If done at the right time and by the right builders, redevelopment can certainly be a win-win situation for all concerned.
     
    There are indubitable benefits to engaging the right builder for redevelopment. Society members get new flats at almost zero extra cost plus additional benefits, while for the builders it is a cost-effective way to:
     
    • Build residential or commercial structures by utilizing the unused potential of the property including FSI, the Transferable Development Rights with gradual capital investment
    • The opportunity to establish a brand footprint in central micro markets where land prices are exceptionally high, or where no new land is available at all.
     
    However, the power that a developer wields over a redevelopment project is considerable, and such power can be - and has been - grossly misused in the past.
     
    A Highly Complex Undertaking
     
    Despite the many benefits of self-redevelopment, it goes without saying that it presents a huge challenge to people who have no expertise in any area of development. From applying for funds to finding the right contractors, and from monitoring the entire process to the fair division of the resulting properties, self-redevelopment is a huge uphill task - especially for people who lack the core expertise and have other jobs and businesses to maintain.
     
    There are also other potential complications on the route to self-redevelopment. As on date, there is no policy governing self-redevelopment projects; it remains the initiative of the respective society. Seeing its potential and probable benefits, the State Government is now mulling the creation of a state policy on self-redevelopment. However, no clear and actionable policy decision has emerged from this as yet.
     
    Inherent Limitations
     
    Currently, the trends witnessed so far indicate that most societies coming forward for self-redevelopment are smaller, with less than 50 units each. This is largely because it is easier to get full consent from all stakeholders if the number of stakeholders is relatively small. As the numbers of stakeholders go up, so does the number of potential change-averse dissidents who want things to remain the way they are.
     
    Unfortunately, banks offering loans for self-redevelopment make it mandatory to get 100% written consent from all involved stakeholders for the project to commence.
     
    Guidelines for Societies Considering Self-Redevelopment
     
    Depending on the right government policies and sufficient success antecedents, the trend of self-redevelopment can become a bigger market force and involve bigger housing projects in the future. Success antecedents are very important, so it is imperative that societies do their due diligence before appointing the necessary entities for the redevelopment of their projects.
     
    As already stated, getting consensus for every detail from all members of the society is very important, and the likelihood decreases as the size of the project increases. Success on this front depends on excellent communication between all society members and should, if possible, involve a steady stream of professionally crafted communications as well as expert in-person presentations to outline all the benefits.
     
    It is a far stretch indeed to expect a barrage of exhortations on a WhatsApp group to convince everyone involved. The best platform is a series of focused society meetings wherein all critical points can be explained in detail, and all doubts put to rest.
     
    A sufficient number of stakeholders must be proactively be involved in several activities until the completion of the project. From getting the requisite approvals from concerned authorities to getting all paperwork done to getting no-objection certificates, society members have to do it themselves.
     
    In other words, successful self-redevelopment calls for an exceptionally high level of co-operation and dedication among all stakeholders.
     
    (Anuj Puri is Chairman of ANAROCK Property Consultants)
     
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    COMMENTS

    Meenal Mamdani

    7 months ago

    The last sentence of this excellent article says in a nutshell why this very worthwhile route is not taken by the many tenants of old buildings.

    Lack of trust is the greatest problem affecting Indian society at present. Everyone assumes that you are up to no good unless otherwise proven.

    I used to think that this lack of trust was the result of the extremely slow judicial resolution of complaints. But perhaps it has become a habit now with the assumption that any one who takes a lead in organizing tenants must have some ulterior motive.

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