DTH consumers caught in a tariff trap

Mumbai: Many direct-to-home consumers who paid for quarterly, half-yearly or annual packs are feeling cheated after their service providers terminated their contracts under a new tariff regime that allows subscribers to pay only for channels they choose. These consumers had opted for long-duration packs before the new tariff order set by the Telecom Regulatory Authority of India came into effect in February.

Many such consumers believed they would not have to pay extra for their favourite TV channels until the validity of their existing packs ended.

However, they are now in a fix as DTH operators terminated the contracts of consumers who did not opt to select channels of their choice.


Consumers flooded the regulator with complaints against DTH operators including Tata Sky, Sun Direct and Independent TV (formerly Reliance Digital TV), people aware of the matter said. Following this, Trai issued a directive on May 1, asking DTH operators to honour the long-duration packs if a consumer hadn’t selected channels.

However, Tata Sky approached the Delhi high court against Trai’s directive and got a stay on Wednesday. The matter will come up for hearing on July 11.

“The problem is multi-fold,” said a senior executive in a DTH company who did not wish to be identified. “At one end, Trai directed us to migrate all the consumers to the new regime or a ‘best fit plan’ based on their existing packages, while after getting a backlash, it is now also asking us to honour the long-duration packs. This will create confusion.” There’s another aspect. The new broadcast framework ended the earlier revenue-sharing model between DTH companies and broadcasters, making it unviable to offer 200-300 channels for the same price.

A senior broadcaster said DTH operators are suffering because all broadcasters have decided to charge subscribers on the basis on the new tariff order. “If they want to, or have to, give channels as per the old arrangement, they will have to shell out money from their pockets,” he said. “Consumers are suffering here,” SK Gupta, Trai secretary, told ET.

While he refused to disclose what action the regulator will take, stating that the matter is sub judice, he said DTH operators should have informed subscribers in advance of the possibility of change in their plans.

“They knew that the new tariff order will be implemented from a certain date. They could have put a disclaimer. They took a calculated risk - now why should consumer suffer?” Gupta asked. Tata Sky CEO Harit Nagpal declined to comment, saying the matter is sub judice.

Tata Sky argued in court that Trai’s new directive contradicts its own framework and would result in two parallel regimes, which will expose distribution platform operators to huge losses. Trai told cable and DTH companies on February 12 to migrate consumers to the new tariff regime by offering them a best-fit plan based on the packs they had paid for.

However, the May 1 directive, as per Tata Sky, attempts to once again “upset this position and arbitrarily reverse provision of services to subscribers as per the old agreements,” which are not in existence anymore.