New Tariff Rules See Cable TV Viewers Switching Over To DTH, Says ICRA Report
Listed DTH players such as Dish TV and Bharti Airtel have increased their subscriber base by 1.3 million till June this year.
The telecom regulator’s new tariff order has made subscribers of conventional cable television jump to direct-to-home service providers, ICRA said in a report.
Three multi-system operators—SITI Networks Ltd., Hathway Digital and GTPL Hathway Ltd.—reported a cumulative decline of 5 million subscribers during the first half of calendar year ending 2019, the brokerage firm’s Emerging Landscape Post The New Tariff Order report said.
On the other hand, listed DTH players such as Dish TV India Ltd. and Bharti Airtel Ltd. have increased their subscriber base by 1.3 million, the report said. This “perceptible” shift is on account of confusion regarding implementation of the new tariff order due to deferment of deadlines, increase in cable bills and implementation of prepaid billing model by multi-system operators, the report said.
The Telecom Regulatory Authority of India allowed subscribers to create their own bouquets and pay for whatever they want from April this year.
For consumers who didn’t opt for the channels of their choice, cable and DTH operators created best-fit packs to ensure that existing monthly bills remained the same or increased marginally. That’s contrary to the objective of the regulator which hoped freedom to choose channels will bring down the monthly bill for customers, according to executives in the broadcast and cable industry—they had told BloombergQuint earlier this year on condition of anonymity out of business concerns.
Cable operators make their own packs, not adhering to broadcaster packs and even refusing to offer a-la-carte channels if they see monthly billing has dropped, one of the executives had said, adding that in many cases, cable operators are not ready with the back-end to offer consumers the choice.
But most digital cable operators consider the churn in subscriber base as transient and expect it to normalise, Sakshi Suneja, assistant vice-president at ICRA, said. “Nonetheless, some shift in subscribers from digital cable to DTH cannot be ruled out, especially with the rise in cable bills.”
The new tariff order has brought a level playing field between the DTH operators and the digital cable operators; and thus, quality of service has become an important differentiator for customer acquisition.Sakshi Suneja, Assistant Vice President, ICRA
Reliance Jio Fiber: A Game Changer?
ICRA, however, said such migration to DTH from cable operators was temporary and tables could turn in favour of Reliance Jio Fiber over the next one year. The Mukesh Ambani-led group company has an edge over its competitors [especially Bharat Sanchar Nigam Ltd.] by virtue of its bundled offerings, high data speed, and the advantage of having ready customer support through the respective teams of its acquired cable operators, the report said. Last year, Reliance Jio acquired controlling stakes in Den Networks Ltd., Hathway and GTPL Hathway.
Last month, billionaire Mukesh Ambani rolled out Jio Fiber— Jio’s fibre internet service priced between Rs 700-10,000 per month. The service comes bundled with a subscription to most streaming platforms and an option to view movies on a first-day, first-show basis. A customer settling for an annual plan will get a free HD/4K LED TV and a set top box.
Jio, however, may find it “challenging” to win the loyalty of pure cable TV viewers or DTH customers as their average revenue per user is as low as Rs 200-250 per month compared to a minimum tariff of Rs 700 for those who may opt for Jio’s plans, the report said.