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TRAI mulls regulating HD channel price

MUMBAI: Concerned with the exorbitant pricing of high-definition (HD) channels, the Telecom Regulatory Authority of India (TRAI) is seeking stakeholders’ opinion whether the price of HD channels should be regulated to protect the interests of the consumers.

In its consultation paper ‘Tariff issues related to TV services’, the regulator is examining if there is a rationale behind the abnormally high price of HD channels vis-à-vis the SD channels.

Presently, there is forbearance on HD channel pricing and the broadcasters are free to fix the price for HD channels. The HD channels are priced many multiples of SD channels despite the fact that broadcasters do not incur any major costs on HD channels except the bandwidth cost for uplinking.

These days, the TRAI said, broadcasters do not have to incur additional costs on production. The content on SD and HD channels is the same. In fact, almost all HD channels are mirror image of SD channels in terms of content except the scheduling, which might vary.

Making matters worse, the HD channels, which were initially ad free and were completely dependent upon subscription revenues, have also begun to carry quite a few advertisements.

Noting that the price ratios of HD and SD channels in terms of RIO rates for similar content is exorbitantly high, thereby indicating large price differential, TRAI said that there does not appear a valid justification for pricing HD channels abnormally high.

Therefore, there is a need to define some relationship between the price of the HD channel and the price of the SD channel and it should be notified transparently.

It said that the distribution platform operators (DPOs) have brought out that broadcasters produce content in HD format and down convert to SD format for distribution to subscribers considering that many subscribers as of now have only SD compatible STBs.

Contending that the charges for such content are same and fall under present regulatory framework as any other channel, TRAI said that the price difference of several times in HD channel price when compared with SD channel price is unjustified and against the interest of subscribers.

It also pointed out that subscribers also complain that they are forced to get SD channels in the same bouquets along with HD channels for similar content. While the subscribers are charged additionally for taking HD channels, no provision exists to reduce the price of the SD channel in the bouquets in lieu of HD channels.

They are of the opinion that broadcaster/DPOs must ensure that similar content not be forced on them in different formats, TRAI noted.

The sector regulator has asked the stakeholders to provide their comments on how the price of the HD channel should be regulated to protect the interest of subscribers. It has also asked whether the HD channel price should be linked with SD and what should be the formula to link HD format price with SD format.

It also wants stakeholders to provide their comments whether similar content in different formats (HD and SD) in a given bouquet be pushed to the subscribers and how this issue can be addressed.

The authority noted that in order to view these HD channels, the DPOs and consumers also bear extra costs. While DPOs have to incur additional cost towards allocation of higher bandwidth for carrying HD channels and in providing compatible STBs employing the latest compression technologies, consumers have to use HD-compliant TV receivers.

“Therefore, the rationale for fixing abnormally high price for HD content TV channels needs a thorough examination as it appears to work against the interest of subscribers,” the authority noted.

HD channels were introduced in the Indian market in 2010 with only three HD pay channels. Presently, there are about 50 HD channels on offer in the market.

The number of subscribers opting for HD channels has risen exponentially particularly on direct-to-home (DTH) platform. Adoption of HD-enabled consumer premises equipment is also showing a healthy increase.

According to TRAI, some platform operators are reporting HD subscriptions as high as 30% of their total subscriber base.

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