DTH Players To Face Profit Issues Due To TRAI Guidelines


TRAI's latest tariff and interconnection regulations might not a good news for the DTH operators. The new regulation will need six to eight more months for effective implementation due to challenges related to revenue sharing between multiple system operators (MSOs) and local cable operators (LCOs).

DTH Players To Face Profit Issues Due To TRAI Guidelines


According to the India Ratings, tariff order is likely to de-risk the business model of MSOs and LCOs. As the revenue stream will contain fixed network capacity charge from subscribers and content commission from broadcasters, thereby effectively passing through content cost.

DTH players, on the other hand, could see their profitability being impacted in the next six to twelve months since they have already sold long-term plans until the end of 2018. Also, the DTH companies won't be allowed to withdraw or reprice a plan that's already in use plan.

The firm also pointed out that after the removal of the 15 percent discount cap on bouquet price versus a la carte (pick-and-pay) channel pricing, broadcasters have started offering 20 percent to 60 percent discount to the channel pricing.To avoid any hike in the final consumer price. Despite similar costs, consumers will have access to fewer channels compared to the previous tariff regime.

The research firm also highlighted that broadcasters' business model will change from B2B (selling content to distributors) to B2C (selling content to consumers) as broadcasters will now market their channel bouquet to end customers rather than rely on MSOs.

The statement comes right after the sector regulator (TRAI) is planning at imposing restrictions on discounts offered by broadcasters on channel bouquets.

Furthermore, the firm opines that allowing a fixed discount on total prices of a selected la a carte channels would empower end-customers to choose their preferred channels (even across broadcasters) and also reduce their monthly payouts.

Our Thought


There is no doubt that offering bouquets at cheaper prices are beneficial for subscribers. But still, there are chances that consumers often get confused and opt for packs suggested to them, rather than exercise their freedom to choose specific channels.

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