Accusing Trai of almost endorsing "illegal activity" by cable operators in its order, the broadcasters body IBF today lashed out at the sectoral regulator for capping wholesale fees at 35 per cent for DTH and IPTV players.

In its tariff order to be effective from September 1, the Telecom Regulatory Authority made it mandatory for broadcasters to make channels available to DTH and cable operators in conditional access system (CAS) areas and IPTV providers at 35 per cent of the corresponding rates for normal cable operators.

The Indian Broadcasting Foundation (IBF) said the order, without addressing the key issue of underdeclaration by cable operators, links the rates for DTH/IPTV to cable, which will hurt the industry. "This is nothing short of endorsing an illegal activity by cable operators and encouraging revenue loss to the exchequer," IBF said in a statement.

Broadcasters have been contending that cable operators underdeclare the number of subscribers, impacting their total subscription revenue. The body alleged that Trai has given in to demands of certain DTH players, who had been asking for discount on content cost.

"This has destabilised existing arrangements between broadcasters and operators by paving the way for re-opening concluded contracts," it said.

"The order, among others, sets the clock back for the ongoing efforts towards digitalisation by micro-managing the business models of stakeholders, without suitably incentivising the creators of content," it said.

IBF contends that India has one of the cheapest pay TV rates compared to its global peers. "The average average revenue per user (ARPU) for pay TV ranges from Rs 800 to Rs 2,500 a month in other countries. But in India, it is currently less than Rs 200 a month," it said, adding in such a scenario, pricing should be left to the market forces as putting a price cap would impede the growth and creativity in the industry.