Elara Capital's Karan Taurani explains how Trai's new tariff order impacts broadcasters, distributors

The Telecom Regulatory Authority of India (TRAI) has released amendments to the new tariff order for broadcasters and cable operators -- setting up new rules on a-la-carte channel prices and network capacity fee.

Discussing the impact of this order on broadcasters like Zee and Sun TV, Karan Taurani of Elara Capital said, “For Zee, the earnings per share (EPS) impact could be in the range of about 8-9 percent of a downgrade because of lower subscription revenue and anticipation of lower ad revenue. Due to the TRAI order, a lot of advertisers will be cutting down ad spends or probably putting things on hold." So, prima facie there could be a negative impact of close to 7-9 percent but one will have to wait and see what the broadcasters do in terms of bouquet, packages etc.," he added.

According to him, there would be an impact on distribution front as well because earlier there was no capping on network capacity fee (NCF). However, now TRAI has tried to cap the NCF at about Rs 100 at the lower level and Rs 160 at the upper level. "That capping will definitely have a negative impact on the revenue of distributors,” said Taurani.