TRAI releases Draft Tariff Order for Set Top Boxes

Published in The Hitavada CityLine on April 17, 2013

Set Top Box: TRAI favours no activation, installation charges

n After digitalisation in 38 cities, TRAI releases Draft Tariff Order for STBs and invites comments till April 26
n Monthly charges to be based on bouquet of channels, subscriber opts for

By Kartik Lokhande
After digitalisation of cable television in 38 cities across the country including Nagpur, Telecom Regulatory Authority of India (TRAI) has released Draft Tariff Order for Set Top Box (STB). In the draft order, TRAI has favoured ‘nil’ installation and activation charges for STBs.
In the draft order, TRAI has worked out standard tariff package for STB and has specified details like rent per month per STB, security deposit that is refundable, deduction from refundable security deposit spread over the period of five years, repair and maintenance cost etc. Surprisingly, this has come after 11 days since digitalisation of cable television in 38 cities of the country. Remaining cities and even the rural areas are to be brought under digital addressable cable television systems by December 2014.
“No installation charges or re-installation charges (except in case of shifting of connection) or activation charges or smart card/viewing card charges is to be levied by the cable operator on the subscriber,” states the draft tariff order. Further, as per the draft order, cable operator will not levy repair or maintenance charges on subscriber up to five years from activation of STB. However, subscriber will have to pay repair and maintenance charges from sixth year onwards. TRAI has specified standard tariff package giving four options based on its assessment of the situation. And, the rent per month per STB has been specified excluding taxes.
As STB deployed by one operator may not be compatible with network of another operator, subscribers have to shell out money everytime they shift from one operator’s area to another. Besides, in case a subscriber wishes to return STB, MSOs will calculate ‘depreciation’ for electronic goods under Income Tax Act and refund lesser money. As far as Nagpur city is concerned, MSOs made available different models of STBs to subscribers in the price band of Rs 350 to Rs 3,000. Considering several such aspects, TRAI has provided an easy exit option to subscribers and to ensure availability of STBs at reasonable cost and terms, and has come up with standard tariff package for STB.
The package has been worked out considering the ‘total cost’ of STB as Rs 1,750, with a five year life span of STB. The residual value of STB has been taken as ‘nil’. TRAI has calculated monthly rental based on ‘cost’ of STB on equated monthly installment (EMI) at 15 per cent per annum for a period of 60 months (five years). As per the draft order, subscribers will not have to pay monthly rental after a period of five years and the STB will become his/her property. Besides, cable or DTH operator will have to refund full security deposit to subscriber without any deduction. Cable operator will refund full security deposit without any deduction to subscriber if he/she returns the STB at any point of time within five years, provided that STB is not tampered with.

Monthly charges to be based on package subscribed
Though TRAI has come up with draft tariff order for STBs, it has not specified monthly tariff for cable television viewing. According to Additional Collector Asha Pathan, the monthly charges for viewing cable television will depend upon bouquet of channels one subscribes. Currently, as far as Nagpur is concerned, MSOs are yet to offer different packages to subscribers as they are in the process of finalising the packages. Once the packages are finalised, subscribers will be free to choose from ‘cable television plan’ offered to them. In case of DTH services, companies offer various plans and collect monthly charges accordingly.

Standard monthly rentals for STB proposed in TRAI draft order
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Particulars                                                                 Options
                                                   I               II                 III                 IV
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Rent per month per STB     Rs 36.63     Rs 31.63     Rs 32.12     Rs 22.60
Security Deposit                  Rs 400        Rs 800        Rs 400        Rs 800
Installation charges              Nil               Nil               Nil               Nil
Activation charges                Nil               Nil               Nil               Nil
Smart Card/viewing
card charges                         Nil                Nil               Nil              Nil
Repair and maintenance
charges                                 Nil                Nil               Nil              Nil
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Providing options to subscribers a must for cable operators
According to TRAI guidelines issued earlier, a cable operator has to offer STB under outright purchase, rental, or hire-purchase schemes ‘at the time of subscription’.
In Nagpur, after a public outcry over different prices for STB made available by different multi-service operators (MSOs), the MSOs submitted a price list of STB to district administration implying that STB was being sold to subscribers. Later, they clarified that they were ‘leasing out’ STB to subscribers. However, in both the cases, most of the subscribers did not get either a receipt or a lease agreement. ‘The Hitavada’ reports in this regard stirred the hornet’s nest. In the draft order, TRAI has asked MSOs and DTH service providers to offer STB to subscribers on purchase, rental, or hire-purchase basis.
Besides, a cable operator is required to prescribe terms and conditions for return of STB ‘at the time of subscription of the service’. As far as existing rules regarding return of STBs are concerned, they include refund of security deposit (if any) after adjusting the dues, if any. In case of a subscriber shifting his premises within service area of cable operator, he/she shall be given a ‘transfer voucher’ for provisioning of a new STB on the same terms and conditions at the new address. If a subscriber is not satisfied with the services provided by cable operator, he/she is free to opt out and the cable operator has to allow the subscriber to surrender STB after making deductions in accordance with the ‘conditions specified to the consumer at the time of purchasing’ of STB. “However, such deductions shall not exceed 25 per cent for each half year or part of it,” state the existing rules.