Trai allows 27.5% rate rise by cable operators

Viewers may have to shell out 15% more

The Telecom Regulatory Authority of India (Trai) has allowed a 27.5 per cent rise in the rates charged by cable operators in places where digitisation has not been completed. The rise could be passed to consumers who continue to use analogue cable television.

However, the regulator has also informed the entire rise will not be imposed at once since consumers may find the increase too drastic. Hence, in the first phase, starting Tuesday, the cable subscription rate will be increased 15 per cent. The second instalment for the inflation-linked increase would be made from January 1 through a separate order.

This is the fourth rise since the order came into force on October 1, 2004, after the inflationary rises of seven per cent in 2005, four per cent in 2006 and seven per cent in 2009.

The rise comes after Trai had approached the Supreme Court for permission to review the original order of 2004 to make adjustments for inflation. In February, the court allowed the body to review the rate ceiling for cable television subscribers. As a result, the proposed rise is 27.5 per cent. Since the first order was in 2004, there is no provision for rates for the digital addressable system (DAS). So, the cities in the Phase-I and -II of digitisation do not fall under this order.

However, for the sake of uniformity, the current practice is to derive the digital rates from the analogue's, as approved by Trai.

"Since the order has come out on Monday, it will be difficult to say how much the raise will be. We will all go through the order in detail and take a call as a sector," said Anil Malhotra, chief operations officer, SitiCable. Tony D'Silva, chief executive, Hinduja Media Ventures, echoed this.

An officer from the cable and broadcast sector said, "It is too early to say anything. But one must keep in mind the raise can be up to 15 per cent and not an absolute 15. If the sector feels a lower raise in fees will do, it may be so."

"The impact on digital customers will not be felt immediately by existing customers at least since there is a rule against changing the composition and pricing of packages for six months since the start of subscription. Thus, the cable digital operators in the digitised territories will be able to implement the raise only for new customers.