Broadcasters, channels decline after Trai caps MRP on individual channels

Sun TV Network slipped over 6 per cent, while Balaji Telefilms and Sahara One Media dipped over 4 per cent.

Market News : Shares of channels and operators declined on Thursday after Telecom Regulatory Authority of India (Trai) made amendments to the new regulatory frameworks to allow TV users access to more channels at lower subscription price.

Among individual stocks, Sun TV Network slipped over 6 per cent, while Balaji Telefilms and Sahara One Media dipped over 4 per cent each, and Zee Entertainment and Den Networks both slid over 3 per cent in early morning trade today. The Nifty Media index dipped over 1.4 per cent as compared to the benchmark Nifty50 index's gain of 0.3 per cent.

However, most of these stocks recovered from their intra-day low and were trading in green by 10:30 AM. On the other hand, Sun TV Network and Zee Entertainment were trading lower by 3 per cent and 1 per cent, respectively.

The Trai has made the amendments to the New Tariff Order (NTO) according to which cable operators will have to provide 200 channels for Rs 153. The regulatory authority has also reviewed the pricing of channel bouquets compared to a la carte ones. The regulator has now set January 15 as the deadline for broadcasters to announce their new pricing structure.

At present, direct-to-home (DTH) or cable TV operators provide only 100 channels for a network capacity fee (NCF) levy of Rs 153 (Rs 130 excluding taxes).

According to the NTO that was released last year, consumers were given the option to pay only for the channels that they chose to watch, at the maximum retail price (MRP). Earlier, they were offered pre-set channel bouquets. The NTO was expected to bring monthly bills down, but it was the opposite that happened.

In order to address the huge discounts offered for bouquets, vis-a-vis the sum of a la carte channels, Trai has set two conditions to ensure the pricing of a-la carte channels does not become illusionary. First, the sum of the a la carte rates of pay channels forming part of a bouquet is not to exceed 1.5x the rate of the bouquet of which such channels are a part.