New TRAI DTH rules might only bring a paradox of choice

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TRAI has recently directed DTH operators to comply with a new set of rules and regulations across all their existing consumers aiming to bring more clarity on pricing. The ARPU of DTH operators has already been under pressure. Will the new TRAI DTH rules further strain the balance sheets of the firms OR will it be ineffective? Let’s find out.

A. New TRAI DTH Rules – The Framework

  1. The new framework mandates all operators, including DTH, cable service provider or multi-system operator, to have a base package of 100 channels. The consumer has the freedom to choose free to air (FTA) or pay channels or any bouquet of several channels in that list. The latest list by TRAI shows that there are 330 pay TV channels and 535 FTA channels.
  2. The service provider cannot charge more than 130 for the base package, excluding GST. If you want to watch a pay channel you will have to pay more for every such choice you make.
  3. Out of the list of 100 TV channels in the base package, you will have to deselect any number of FTA channels of your choice and add pay channels of equal number. The overall limit cannot cross 100.
  4. In case you want to watch more than 100 channels in the base package, you can top it up with more channels. For every 25 channels, you add to the list of 100, you pay 20 extra. For example, if you pay 150, excluding GST, you get access to 125 channels. Besides that, you will have to pay extra for any pay channel you include on the list.

Though the offering might sound exciting to few, it is definitely confusing to a lot of consumers. Consequently, many consumers might just not switch over to the TRAI plans. Let’s see what will stop them.

B. New TRAI DTH Rules – The Paradox

I. The curious case of cable operators

Of India’s 197 million TV homes, roughly 100 million are on cable. Of the rest eliminate the 20-30 million on Doordarshan’s DTH service, DD Freedish. That leaves just over 60 million homes with private DTH operators. The 100 million cable subscribers are served by approximately 1 lakh last mile cable service providers. How many of these 1 lakh cable operators will have the know-how, infrastructure and technology to implement and communicate the change are debatable.

II. Comprehension of the new TRAI Plans

The new TRAI plans, packages, Al Carte channels are complicated to comprehend. There are plenty of permutations and combinations to confuse the normal consumer.

Below is how the selection page on Tata Sky looks like. The number of available packs is almost as many in number as the number of available channels. It becomes a toiling task to go through the curated packs, broadcaster packs or al carte channels.

Tata Sky TRAI DTH Plan 2Tata Sky TRAI DTH Plan 2III. Taking the decision to switch

Consumers, even after understanding the nuances of the new rule, might be perplexed once they find uncountable options to chose from. The paradox of choice will play in and the consumers might stick to an existing bouquet.

The country already saw a subdued response to change while mobile number portability was introduced. Though it was expected that everyone will start moving left right and center, in reality, only a fraction of the subscribers actually went on to use the portability.

IV. Pricing

TRAI claims that the consumers will now pay less. However, if you closely look at the pricing of the existing plans they will come in very close to the same bouquet when opted under the new framework. The fact is that one may pay less but only when they drop channels from the bouquet. This will be beneficial for people who don’t see more channels and are happy to drop few.

C. New TRAI DTH Rules – The Implications

Though we are not yet sure that how effective will this be from a consumer perspective, it is certain that the change will bring in some implications in the long run.

  1. TV viewership might show a decline post implementation of these plans.
  2. From an advertiser point of view, the move will now help to ascertain a channel’s viewership more objectively.
  3. On a flip side, urban consumers are tempted to switch to streaming and opting for broadband plans suiting their needs. Tata Sky launching Tata Sky Broadband service is a testimony of this. The new plans might help to keep the DTH connection afloat as the consumers now have a choice to cut down on all unwanted channels and cost.

Read more on Factors Effecting TV Viewership in India

 

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