Controversy over the rise in subscription price rate of Astro

 Astro is currently the dominant firm in TV broadcasting industry

An oligopoly market structure has the following characteristics:

• Few large producers
• Offering homogeneous or differentiated products
• Have control over their prices but mutual interdependence exists
• High barriers of entry

Astro is one of the few providers of pay TV service in Malaysia (few sellers). Due to the market structure, Astro has been able to increase its subscription price rate (control over the prices). Astro is exploiting its exclusive rights (barriers of entry) of broadcasting various  channels to increase the subscription price rate. One of the exclusive right is broadcasting the Barclays Premier League (BPL). Therefore, Astro does not loose subscribers when it increases the subscription price rate of certain exclusive channels. 

Many concerned customers have voiced their objections over the price hike.

 “I do not agree with the price hike, as its broadcasting is often disturbed especially when it rains, what is the rational that Astro wants to burden their customers more?” Steven Ong said

“Is Astro really increasing its price again? It’s hard for me, with a small income, if Astro increases the price, then maybe I have to terminate my Astro account,” Noriah Ali said

What is the reason behind the price hike in 2011 July?

The price hike is mainly due to the content cost has gone up.

In my opinion, Astro should not pass the cost to burden the low-income customers. Astro should instead try to reduce the operational cost by operating the business more efficiently and charge the advertisements fees higher to increase the revenue. Moreover, the government should regulate the pricing practices of Astro strictly and take serious action against Astro's price hike.

Reference
http://www.theedgemalaysia.com/first/212226-new-ruling-could-end-astros-monopoly-on-sporting-events.html