Business Strategy

The Impact of TRAI's Tariff Order on the Indian Television Industry: An Exploratory Analysis

Article Details

Pub. Date	: Dec' 2019
Product Name	: The IUP Journal of Business Strategy
Product Type	: Article
Product Code	: IJBS31912
Author Name	: Diwahar Sunder Nadar
Availability	: YES
Subject/Domain	: Strategic Journals
Download Format	: PDF Format
No. of Pages	: 19

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Abstract

The Indian television sector is one of the most promising sectors with an ever-increasing penetration rate, economic value addition and improvement in technology. The sector has been plagued by unfair prices due to an inefficient market system. The Telecom Regulatory Authority of India (TRAI) which has been regulating the market for two decades has issued eight tariff orders with the objective of moving towards an a la carte policy. The implementation of the a la carte system has modified the channel prices and the dimensions of the sector which mandates research. The study, in an attempt to analyze the tariff orders and channel prices, has employed a theoretical review of the eight tariff orders and descriptive analysis of channel and bouquet prices. The descriptive analysis was conducted in a multi-dimensional manner which includes channel type, language, broadcasters and bouquet. The study concluded that channel prices have changed at an average of 91% per channel and the bouquet discounts changed by 67%. The results implied that the tariff order objective was attained. The study approaches the bundle v/s a la carte tariff policy paradigm with a practical approach unlike previous studies which have focused more on multivariate economic modeling.

Description

The broadcasting sector of India, which has been dubbed as the sunrise sector, is the second largest in the world after China (Ministry of Economy & Industry, 2017; and TRAI, 2018). The Indian Television (TV) Broadcasting industry has been highly dominant by the TV segment due to its effective reach and relatively reduced cost of service which has turned the slow growth paced industry in the early 1970s to become a goliath industry (Vijayasarthy and Illangovan, 2016). The TV broadcasting sector currently consists of 358 broadcasters, more than 875 private satellite TV channels and is expected to grow at a rate of 15-18% (Deloitte, 2018; and KPMG, 2017). TV penetration in India increased from 32% in 2001, 54% in 2013, 64% in 2016 to 68% in 2018. Five states have a penetration rate of more than 90%. In 2018, approximately 836 million individuals and 197 million households were in possession and deriving utility from a TV. The average time spent by an Indian watching TV has grown by 3% and currently stands at 3 h and 44 min (BARC, 2018). India's TV industry revenue grew by 58,800 cr in 2016-17 to 66,000 cr in 2017-18. Subscription revenue which constitutes approximately 60% of the industry revenue rose from 38,700 in 2016-17 to 39,300 cr in 2017-18 and the advertising revenue grew from 20,100 in 16-17 to 26,700 in 2017-18 (TRAI, 2018).