Friday, August 7, 2009

Non-Cas tariff: Trai asks stakeholders to disclose financials

The Telecom Regulatory Authority of India (Trai) has asked stakeholders to disclose their financial and operational details, something which broadcasters, cable TV operators and DTH service providers have been cagey to reveal. The sector regulator says such details would help it have a "realistic understanding" before issuing the consultation paper relating to tariff for cable TV services in non-Cas areas. The information that Trai is asking for includes audited financial data and break-up of key revenues and costs; insights into the operating model; factors determining key payments being made by various stakeholders in the current supply chain; and issues in the current market scenario and their impact on the business.

"In line with the established transparent procedure followed by Trai, the Authority has initiated the consultation process on the issue of tariff for cable TV services in non-Cas areas," the sector regulator said. Broadcasters will have to provide information like their yearly financial performance, ownership structure, cross-media ownership, pricing, revenue and carriage and placement fees. If this isn't enough, Trai wants broadcasters to disclose their advertising and subscription revenues separately from India and overseas and from different platforms. What could irritate broadcasters further is the revenue break-up that the sector regulator seeks for each channel. Distribution platforms such as DTH and cable TV operators will have to furnish details on carriage & placement fee and content cost. In case of DTH operators, Trai would require a breakdown of the content cost based on revenue share, minimum guarantee and lumpsome payment. They would also have to thrash out details of subscription revenue by bouquet/channel and region.

MSOs will have to open up their carriage and placement fee sharing arrangement with the local cable operators (LCOs). They will also have to provide brand-wise carriage and placement fee norms for the Tam markets (which measure ratings of programmes and channels based on which advertisers spend their monies). Trai has appointed Ernst & Young to assist in this exercise. Trai has asked broadcasters, aggregators (authorised distributors of the broadcasters), DTH operators, multi-system operators (MSOs), cable operators and consumers to submit the information in the prescribed format by 17 August. Trai said it has initiated the consultation process as per the Supreme Court order dated 13 May. The apex court had directed Trai to consider the matter relating to tariff for cable TV services in non-Cas areas de novo as regards all aspects.


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