Cable TV Operators Decide to Levy Service Charges as Earnings Decline Under New TRAI Tariff Regime

Cable Operator

The operators association in Kolkata has decided to write to TRAI to ask for permission regarding the collection of an additional fee from subscribers for maintenance.

After the introduction of the new tariff regime by the industry regulator, the prices for cable TV operators, DTH providers and broadcasters have been under a fluctuation. For the cable operators, it has only been a downhill road ever since the new TRAI regime went into implementation as all have fallen victim to reduced earnings.

Cable operators in Kolkata have decided to levy a service charge on the viewers as the operators claim it has become necessary to provide continued maintenance. The cable operators have also said that their earnings have slumped by about 45% after the introduction of the new TRAI tariff regime.

Earnings for Operators Sliced in Half After New Tariff Regime

The new problems come at the hem of the latest TRAI mandate which has caused the earnings for the cable operators to decline. Before the order, each cable operator used to get around Rs 175 to Rs 200 per cable connection, however, after the TRAI tariff regime, these earnings have come down to only Rs 90. With this reduced income, cable operators are finding it hard to give out salaries to their employees who carry out the maintenance work like the collection of subscription fee or servicing of equipment. The cable operators’ association in Kolkata got together and decided to write to the Telecom Regulatory Authority of India (TRAI) to ask whether they can levy a service charge or not. As per a member of the association, it would be difficult to serve the subscribers without collecting an additional service fee of Rs 20 to Rs 25.

Paying Employees Becomes Hard for Cable Operators

What’s interesting to note is that although pay channel prices have gone up, the earnings of the operators have come down. As per the new system, 80% price of the pay channels goes to broadcasters, while the rest 20% is kept by Multi-system operators (MSOs) and cable operators. Out of the base fee which is charged for the first 100 FTA channels, operators get to keep Rs 75. For a package priced at Rs 200, operators earn around Rs 80, whereas for a package priced at Rs 300 they net above Rs 95. A package priced around Rs 400 nets the operators around Rs 110.

Now, we are yet to see how TRAI intervenes in this matter and whether or not the regulator allows the operators to levy a service charge so that they can carry out easy subscription-fee collection and repairs for the subscribers.

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