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Price deregulation only after complete addressability, says TRAI official
MUMBAI: The price of television channels cannot be deregulated unless there is complete addressability, said Telecom Regulatory Authority of India (TRAI) principal advisor on broadcasting and cable services SK Gupta.
Gupta said that TRAI has no reason to remove price caps because the situation is still not congenial for such a move.
He, however, agreed that in an ideal situation, prices should be left to the market forces to decide. That can happen only when the consumers are given the option to subscribe to individual channels of their choice.
“Over-regulation is not required as it kills innovation. However, consumers still do not have choice. How many consumers have a choice of individual channels? We are still dependent on bouquets. Consumers don’t want all the channels,” Gupta lamented.
Speaking during a panel discussion at FICCI Frames, Gupta said: “Prices can be de-regulated only when there is total availability of choice to consumers. This situation is not there because of which there have to be certain broad guidelines. We need to make the industry truly addressable.”
Star India COO Sanjay Gupta, Viacom18 Group CEO Sudhanshu Vats and Discovery Networks Asia-Pacific EVP and GM South Asia and Southeast Asia Rahul Johri contended that price regulation was holding back the industry and it was about time that TRAI re-looked at it in a holistic manner.
Sanjay Gupta said that the broadcasters are producing 100,000 hours of content every year which they are not able to monetise.
“One big issue is that the industry has been regulated from a wrong perspective. For any industry to grow, you require capital to create innovation for the consumer and unlock value,” Gupta averred.
He also stated that market forces are capable of determining the right price. “We are running 21st century industry with pre-liberalisation mindset,” he said on a note of regret.
Vats said that there is enough competition in the industry to deregulate content price. He also said that while the industry is debating on price deregulation, the changes in technology would make the whole issue irrelevant.
Johri said that the broadcasting sector has been built by entrepreneurs and over-regulation will throttle innovation. “We want to build scale with government and regulator support,” he asserted.
With respect to regulation, Tata Sky MD and CEO Harit Nagpal is on the same page as his broadcasting colleagues. “You can either have monopolies or regulation. You have regulation when you have monopolies,” Nagpal stated.
He said that there is no need for regulatory intervention when service providers are doing all they can to keep their customers happy. “The regulator must ensure that service providers get adequate infrastructure to keep providing better services,” he added.
Giving a cable TV company’s perspective, Siti Cable CEO VD Wadhwa said that consumers are willing to pay provided they get quality service. “There is no reason why ARPU can’t grow if we work together. We must co-operate in order to monetise the business better,” he stated.
Wadhwa noted that the profitability of all the stakeholders would double, provided the monetisation level within current ARPU is improved.
Earlier, in response to whether TRAI’s recommendations were not taken seriously by the Ministry of Information & Broadcasting (MIB), Gupta said that the observation was not correct.
He, however, agreed that in certain cases decision-making has taken longer time than one can think.
“It will not be appropriate to say that TRAI recommendations are turned down or not acted upon by the government,” he asserted.
Supporting Gupta’s contention, MIB additional secretary JS Mathur said that it is a wrong notion to say that the ministry does not pay heed to the regulator’s recommendations. He gave the example of cable TV digitisation and FM radio e-auctions where TRAI’s recommendations were taken on-board.
BBC World News COO Jim Egan said that there must be a converged approach to regulation right across telecom and media sector due to the shifting technological paradigm.