Cable Operators Can Charge Rs 25 Extra As Income Falls Under New Cable TV Rules; Will TRAI Allow?
TRAI’s new Cable TV rules are in force effective April 1st, and this has changed the equations of the game. Earnings for cable operators have especially been negatively affected, as people are now paying only for the channels which they wish to watch.
Under these circumstances, Cable Operators in Kolkata have decided to impose additional service fees on customers, to compensate for the fall in income.
This is not something which TRAI has proposed under the new Cable TV Rules.
Will TRAI allow this?
Cable Operators: We Wish To Charge More From The Customer
Some cable operators in the mega-city of Kolkata have united under an association and asked TRAI whether they can start collecting an additional service fee from the customers, to compensate the losses under the new cable TV regime.
Tapash Das from Ideal Cable Operators’ Association claims that their income and revenues have taken a big hit, and only additional fees from the customers can help them revive. Infact, due to low income, they are not even able to pay salaries to the employees.
He said, “Our profit margins no longer allow us to continue with the same number of employees. Only a service charge can help us continue with maintenance and fee collection,”
This additional fees charged will be called as Maintainance Fee, and the Association has asked TRAI if they can impose this fee on their customers.
The Logic Of Cable Operators: Income Reduced By 45%
As per the cable operators in Kolkata, earlier, a typical cable user used to generate profits of Rs 175 to Rs 200, which has now come under Rs 90.
Now, under the new rules, 80% of the income generated from cable users for pay channels go to the MSOs, and cable operators are left with only 20%.
In case of Rs 135 FTA base back, cable operators get only Rs 75.
In case a cable user opts for a pack of Rs 200, then the operator receives Rs 80
If the pack is Rs 300, then the operator earns Rs 95, and Rs 110 for a pack of Rs 400 or above.
Hence, cable operators want to charge Rs 20-25 extra from every customer, to compensate for the loss in income.
Another member from the cable association said, “Fixing cables and collecting subscription fee are round-the-clock work. An average operator employs at least five-six people. Over the last five years, staff salaries have doubled but now, with a reduced income, it will be impossible to serve our customers.”
We have already reported how users are ditching cable TV and opting for DTH services, as more than 30% of the users have shifted. This makes the business model for cable operators tougher, and revenues lesser.
Will TRAI allow cable operators to charge this extra fees?