The new year has brought some good news for television viewers. The Telecom Regulatory Authority of India (TRAI), which also regulates broadcasters, on Wednesday announced a new regulatory framework for cable and broadcasting services with an aim to control rising costs for consumers. According to TRAI, cable TV users will now be able to access more channels at lower subscription rates.

The new order, effective from March 1, has reduced the cap on the maximum retail price (MRP) of individual channels. Broadcasters can only include channels that have an MRP of ₹12 or less in the bouquet, according to the new framework. Earlier, the price was ₹19.

“Since channels priced above ₹12 cannot be part of a bouquet, it will have a neutral impact. Broadcasters usually won’t charge more than ₹12 as 93% of the revenue is from the bouquet and only 7% is à la carte-based,” Karan Taurani, vice president-research (media), Elara Capital says.

The regulator also said that the sum of all the à la carte channels forming a part of the bouquet cannot be more than 1 ½ times the price of the bouquet. In simple terms, if a broadcaster offers five channels on the à-la-carte basis for ₹50 a month, then the cumulative MRP of the bouquet cannot exceed ₹75 a month. According to Elara Capital, there will be enhanced movement towards selective viewing as few consumers may move towards à la carte due to price correction. “Size of the bouquet will come down in terms of channels to 3-4 channels from about 8-10 channels, which will lead to a big management problem for distributors,” Taurani adds.

Currently, broadcasters give 60%-80% discounts on their bouquets compared to the à la carte pricing. But this move will restrict the discount on channel bouquets to around 33%, according to experts.

TRAI has also fixed ₹160 as the minimum monthly subscription price for consumers to access all free-to-air channels. For users with multiple TVs and more than one TV connection with a different name, they will be charged a maximum of 40% of the declared Network Capacity Fee (NCF) for the secondary TV connections.

“Channels declared mandatory by the Ministry of Information and Broadcasting will not be counted in the number of channels in the NCF. Earlier, there was no cap on the number of channels in the FTA (free-to-air) category,” TRAI said. The regulator has also revised the maximum NCF charges to ₹130 for 200 channels (exclusive of taxes).

It has also put a cap of ₹4 lakh per month on carriage fee by a broadcaster to a DPO (distribution platform operator) for carrying a channel in the country and allowed DPOs to give discounts on long-term subscriptions, which have six months’ validity or more. “It may have a mild positive impact on broadcasters. This implies that there is a ‘capping’ in terms of carriage fee being charged, hence broadcasters here are in a win-win situation, as the rush for FTA is bound to increase for their smaller channels, which are not a part of the bouquet,” Taurani says.

“Overall, we believe this move will have a negative impact on broadcasters’ subscriber revenue, which has grown at almost 30%-40% year-on-year due to higher share and increased ARPU [average revenue per user]. With Jio pushing its Jio TV offering, which has access to channels free of cost for Jio subscribers, we believe the TV channel monetisation will go through a major disruption in the near term,” he adds.

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