DTH ops urge TRAI to allow discount on NCF without any price cap

MUMBAI: Direct to home (DTH) operators have come out in favour of enabling discounts on network capacity fee (NCF) and distributor retail price (DRP) in the new tariff framework.

In its submission to the Telecom Regulatory Authority of India’s (TRAI) consultation paper on tariff-related issues, Dish TV has submitted that discounted NCF and DRP for the multiple TV connections, being in the consumer interest, should definitely be allowed.

To facilitate the same by the DPOs, it added that provision should accordingly be made in the regulation that the broadcasters should also extend discounted price for its channels/bouquets provided for such multiple connections in their RIOs.

Tata Sky has submitted that the discounts on multi-TV were made possible by the distribution platform operators (DPOs), in the previous regulatory regime, because of the ability to negotiate a mutually beneficial agreement with the broadcaster.

It further stated that the subscribers are served best when free-market principles come into play on the bedrock of mutually negotiated agreements between the stakeholders. The concerns being raised by the subscribers on Multi-TV pricing is a direct consequence of the new regulatory regime which prohibits mutually negotiated agreements, it added.

“We, therefore, believe that this consultation process should review the strait-jacketed approach of the NTO and make way for negotiated agreements,” Tata Sky noted.

The DTH operator also lamented the fact that the current regulation is prescriptive and narrow in its interpretation, that DPOs were unable to even provide voluntary discounts to their subscribers — be it Long Term or Multi-TV etc. In this regard, TRAI had set-up a multi-stakeholder committee which has recommended that DPOs should be allowed the flexibility of giving discounts on the NCF for Multi-TV.

“We are in agreement, to the limited extent, that this consultation process and the regulatory amendment thereafter should allow for a provision to DPOs to enable discounts on the NCF to their subscribers,” Tata Sky said.

Both Dish TV and Tata Sky are against any move to fix a cap on NCF for multi-TV connections.

Dish TV submitted that there should not be any additional cap on NCF for the subsequent connection and that the cap on NCF even for such connections should be governed by the existing Rs. 130 plus taxes as provided in the regulation.

It also noted that the DPOs should enjoy the freedom to prescribe any reduced NCF within the permissible limit as per their business requirements. “It is submitted that offering of discounts by the broadcasters for the multi-TV connections has been an industry practice. During the previous regime, the broadcasters while entering a CPS deal with DPOs were offering discounts on the multi-TV connections and the same practice can be followed even now.”

On the question, whether distributors should be mandated to provide a choice of channels for each TV separately in Multi TV connection home, Dish TV and Tata Sky said that this facility is already being provided to consumers.

Tata Sky said it is strongly against any further move by the authority to announce capping of NCF for Multi-TV subscribers for subsequent TV connections as the new regulatory framework is still in its infancy and some more settling down time is required. As it is, all the revenue stream of the DPOs has been capped, and DPOs are trying to still make sense of the revenues and sustainability.

“We are of the view that the regulatory provision should enable NCF discount for Multi-TV. However, there is absolutely no need to fix any caps on NCF,” it stated.

The DTH operator also stated that the broadcaster should also be allowed to offer discounts, (outside of the 15%), to Multi-TV, Corporate, Bulk subscribers in coordination with the DPOs. The technical feasibility of operationalising those discounts should be left to mutual negotiation, it added.

“The regulatory amendment should provide for an enabling mechanism. If TRAI is keen to create a special tariff for Multi-TV (i.e. for the 4% elite homes that have more than one TV), it should not force the DPO to bear this discount, as that would make the recovery of the incremental capital investment in a multi TV home, even more, difficult and instead should come from the DRP discounts,” it stated.

In its submission on NCF and DRP, Airtel Digital TV submitted that there is a need to de-link the subscription of channels with the subscription of the distribution platform. In the present scenario, the subscribers have to pay subscription charges for a channel to multiple distributors if they wish to view the same channel on multiple platforms.

It further stated that in the previous regulatory regime, it was not possible to segregate the pricing of channels from the price charged by the distributor for using its network. However, with the introduction of the new regime, the pricing of broadcasting channels and network capacity of Distributors has been segregated.

“However, customers still have to pay individually to each distributor (and ultimately to the broadcaster) for accessing the same channel on its distribution platform. Ideally, if a customer has already paid subscription charges for a channel to a broadcaster for accessing its channel on one distribution platform, then they should be able to access that channel over any platform,” the DTH operator.

It also stated that a technical solution can be used for sharing subscription information of customers across the distribution platforms to enable the customers to avail subscription of channels on one platform, which can be used by the customer to view that channel on any platform.

According to Airtel Digital TV, this model of de-linking broadcast subscription and distributor subscription will yield the following benefits: a. Customer will not be required to pay individually to each distribution platform for accessing a channel for which he has already paid subscription charges to one Distribution Platform. b. It will help the customers to switch from one operator to another as they will be able to use the same subscription on another platform. c. It will help customers to simultaneously access channels on multiple type of platforms depending on the situation (place & preference).

The DTH operator has proposed that once the customer has opted the subscription of a channel say on a DTH platform, the same should be allowed to be viewed on any platform such as TV, laptop, tablet, etc. “In other words, the scope of multi-connection should not only encompass the TV screen but should also be extended to other screens such as mobile, laptops, etc. as long as the customer has subscribed to that content on one of primary connection.”

In line with the above proposition, the DTH operator has suggested that the definition of multi connection can also be specified to avoid any conflicts between the entities in the ecosystem. “We suggest that the mutli-connection/subscription can be defined as a service/ facility made available, on the request of any customer, to have more than one device including TV, STB, mobile screen or laptop etc. on the same, but up to a maximum of 4 such devices in the name of the same customer.”

Sun Direct has submitted that it may not be possible for DTH operators to provide discount on NCF and DRP for multiple TVs in a home since the incremental cost of a second TV connection onwards in a given home is the same as that of providing the first connection.

It also stated that broadcasters should be allowed to offer differential MRPs for different regions and localities based on the feedback of DPOs. Price fixing should be a function of market forces. “The query of TRAI regarding different MRP in a multi-home TV connection, in fact, supports the case of bundling of channels to reduce the price of channels for consumers. However. we cannot comment upon a broadcaster’s technical feasibility to identify multi TV connection homes.”

The DTH operator also stated that DPOs should not be mandated to provide a choice of channels for each TV separately in Multi TV connection home. “This will only lead to further strain on a DPO’s billing and IT systems as well as customer care services.”

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