Impact of New Tariff Order (NTO-2): Detailed Analysis From Indian Broadcasting Federation

Impact of New Tariff Order (NTO-2): Detailed Analysis From Indian Broadcasting Federation

Indian Broadcasting Federation (IBF) today (10th January, 2020) invited all stakeholders, industry leaders for a press meeting on the Challenges & Opportunities brought upon the industry by the recent amendments to Tariff Order, Interconnection, regulations and quality of services Regulations of 2017 for the Broadcasting & Cable sector issued by the Telecom Regulatory Authority of  India.

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In this press meeting, Indian Broadcasting Federation has highlighted some issues on New Tariff Order (NTO – 2) which was implemented by TRAI on 1st January, 2020.

The Authority notified a cap of Rs. 19/- as the threshold for creating bouquets and backed this up with empirical analysis in the month of February 2019.  And now it has been reduced by 40% to Rs. 12/- without any logical rationale or consumer insight to back this change.

After few months, TRAI had reintroduced the twin conditions, in NTO 2.0, which negatively impacting the pricing and packaging of bouquets. The Broadcasters will have to either price their premier channels very low, hampering the ability to provide quality content or increase the price of other channels just to fit in the maths but artificially
increase the burden on consumers. It limits the number of channels in the bouquet, which in-turn reduces the value delivered to consumers.

TRAI has removed discounts on bouquets in New Tariff Order (NTO – 2).

While the stated intent of the Regulator is to allow consumers to get content at more affordable rates, the fact that it’s the imposed Network Capacity Fee (NCF) is the single largest component of end consumer price is not being addressed.

A few months back, at the request of the Regulator, the major broadcasters including Sony, Star, Zee, Viacom introduced promotional schemes and offered their premier channels at an MRP of Rs. 12/- for a limited period. But the results showed no uptick in the a la carte offering in spite of the price reduction, clearly highlighting the consumer’s preference for bouquets. In fact, the members suffered revenue losses in this whole chapter.

Indian Broadcasting Federation in its response to TRAI’s consultation paper had pleaded to allow the industry to come to terms with the current NTO before making further changes. In fact, TRAI itself had acknowledged this need by proposing a 2 years moratorium on further regulation. But TRAI ignored all IBF’s pleas  and in this exercise, content creators and owners have been disempowered by taking away their fundamental right to monetize their content in the manner they choose.

To View The Statement Issued by Indian Broadcasting Federation (IBF), Dated: 10 January, 2020, Please Click Here

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