Broadcasters disconnect signals to cable operators over new RIO, over 4.5 crore Cable TV connections impacted

Leading broadcasters including Disney Star, Zee Entertainment Enterprises and Sony Pictures Networks India Ltd have stopped providing feed to cable operators who have not signed fresh agreements with increased prices under the New Tariff Order (NTO).

While, All India Digital Cable Federation (AIDCF), the apex body of digital cable television players, said they have declined to sign the agreement as it would increase the cost from 25 per cent to 35 per cent and put an additional burden on consumers and are considering legal recourse over it.

Earlier, the broadcasters issued notices on February 15 to cable operators/Multi System Operators to sign the new Reference Interconnect Offer (RIO) for New Tariff Order (NTO) 3.0 issued by the sectoral regulator TRAI.

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However, cable service providers did not heed it leading to the disconnection of signals by the broadcasters.

"Disney-Star, Sony and Zee have disconnected services of their channels on the members of AIDCF as well as other cable TV platforms. These cable TV platforms have not executed the revised RIOs with these broadcasters as a mark of protest against the unreasonable pricing by the broadcasters," said an AIDCF statement.

This action has resulted in depriving around 4.5 crore cable TV families across the country from being able to watch channels transmitted by these broadcasters, it added.

"Indications are that the proposed increase in prices by the broadcasters would be exorbitant and the increase in prices for the customers could be as high as 60 per cent," it said.

Under NTO 3.0, which is to be implemented in February, prices of the popular channels have been increased by 15 per cent.

While issuing a statement over the development, Indian Broadcasting and Digital Foundation (IBDF), a body which represents the broadcasters and digital streaming platforms, said some cable operators did not sign fresh agreements forcing them to disconnect their services after serving due notice.

"Broadcasters had taken a price increase after 4 years post the release of new NTO guidelines by TRAI. Most DTH and Cable operators, whose base adds up to 80% of India's PayTV customers, have already started implementing the new prices and they have had to increase consumer prices by approx 5 per cent after 4 years," said IBDF statement quoting Secretary-General Siddharth Jain.

It further said: "Some cable operators did not sign fresh agreements, thus forcing broadcasters to disconnect their services after serving due notice."

According to AIDCF, besides its members, various independent MSOs have also been disconnected by these broadcasters since most of the large and medium MSOs have refused to sign the RIOs with this increased price.

AIDCF President Anirudhsinh Jadeja said the matter is sub-juice also as the federation has challenged the NTO 3.0 before the Kerala High Court and in which hearing would commence next week.

On being asked about the next course of action Jadeja said: "We would pursue legal action. We would also give a new representation to TRAI to roll back NTO 3.0 and allow the old regime to continue."

The AIDCF president said that the broadcasters are going to gain 25 to 35 per cent more under the new NTO regime.

"This would also increase the price hike and put additional burden on the consumer," he said.

AIDCF members have a combined market share of over 80 per cent.

Commenting over the development Karan Taurani SVP of Elara capital said the reason for this blackout is that these broadcasters are demanding a price hike of approx 25-30 per cent on the packages, which the MSOs have not agreed upon as they believe their customer base is more price sensitive than the DTH base.

"We believe this is a big dampener for TV broadcasting growth rates which are already struggling due to constant threat from consumption shift towards digital."

Taurani also added this interim blackout will have a "significant negative impact on ad revenue" for the broadcasters, apart from a hit on the subscription revenue.

NTO 3.0 was to be implemented in the month of February 2023 and most broadcasters wanted to go for a price hike, as they had not increased the prices in the last three years due to uncertainty over NTO implementation, he added.