Cable television consumers are set for a big bonanza as their monthly cable bills may come crashing down by as much as 75% compared to DTH subscribers, once the Telecom Regulatory Authority of India (Trai) endorses a proposal to this effect. Essentially, consumers will get an incentive to hold on to their cable connections by paying lower monthly bills, compared to their DTH counterparts.
The move, according to sources, is aimed at making DTH services available to those who can afford it while allowing the masses to access cable services at an affordable price.
Trai is actively looking at making the existing DTH content cost as the benchmark for cable pricing for large cable distribution firms or Multi Service Operators (MSOs).
Trai is looking to drastically reduce the content cost on cable platform to 25% of the existing cost fixed for DTH operators by a 2006 order from TDSAT.
And since the content cost for DTH operators is anyway fixed at half the prevailing rates in the non-CAS cable homes, which is estimated to be over 85 million, the move will reduce the existing cable bills, experts said.
Trai is currently undertaking a complete re-look at the existing cable tariff regime as directed by the Supreme Court.
It is expected to announce its revised tariff structure for the cable industry shortly, sources in Trai said.
As part of this exercise, Trai may reduce the content cost for MSOs by 25% compared to the DTH operators, sources close to the development said. Currently, DTH operators pay the broadcasters at 50% the rate fixed for the channels in the non-CAS cable market (as per a 2006 court order). This means, if a channel is priced Rs 50 in the non-CAS market, the DTH operators currently pay the broadcasters Rs 25 for it. Under the proposed formula, the cable companies will get to pay the broadcasters only Rs 18.75 for the same channel. This means, the consumers will also get to pay lower cable bills once the MSOs pass on the benefits in order to stop them from taking a DTH connection, sources said.
The move is also expected to boost the fate of cable distribution firms including, Reliance Digicom, Hathway, InCable, WWIL and DEN, who have been facing stiff competition from the fast-growing DTH industry, which has converted almost 27-30% of the cable consumers into DTH subscribers. Overall, there are 25 million-plus DTH subscribers and over 85 million cable homes.
MSO Alliance, an apex body of all large cable companies, has submitted a detailed list of demands to Trai in order to help the cable industry grow at a faster pace. ?Reduction of content cost to 25% of the DTH formula, making 2013 as the cut-off date for complete digitalisation,freezing the existing revenue outgo of MSOs for next three years, access to a-la-carte channels from broadcasters and no regulations on carriage fees, are among the list of demands discussed by the MSO Alliance with Trai,? a top executive of MSO Alliance told FE. Trai is expected to further deliberate on the matter with the concerned stakeholders on Monday.