I&B ministry may revise DTH licensing norms.

Trai recommendations on increasing licence duration of DTH firms to 20 years and reducing annual fee to 8% of adjusted gross revenue have been broadly accepted. The information & broadcasting (I&B) ministry is likely to change the licensing norms for direct-to-home (DTH) television operators, increasing the validity period of the licence and reducing the annual fee, three persons familiar with the matter said. The I&B ministry has broadly accepted recommendations of the Telecom Regulatory Authority of India, or Trai, which proposed increasing licence duration of DTH firms to 20 years and cutting their annual fee to 8% of adjusted gross revenue (AGR), said the people, who requested anonymity because the decision is yet to be made public. DTH firms pay an annual fee equivalent to 10% of gross revenue (as reflected in their audited accounts), according to guidelines posted on the official website of I&B ministry. The licence is valid for 10 years. DTH operators also need to pay an initial non-refundable entry fee of Rs.10 crore.

“The ministry has accepted our recommendations and will soon amend the DTH guidelines with the approval of the cabinet,” said a Trai official, one of the three people cited above, who requested anonymity because he is not authorized to speak to the media. In July 2014, Trai reviewed the existing DTH policies after being told by the ministry to provide recommendations for extending DTH licences. Besides suggestions to change the licence duration and lower the annual fee, Trai submitted recommendations on cross-holding in broadcasting and distribution services which allowed one broadcaster to control only one distribution platform—either a DTH firm or a cable company. To be sure, the I&B ministry will now require the union cabinet’s approval on these recommendations to amend DTH policy guidelines. India has six private DTH firms: Zee group-owned Dish TV India Ltd, Reliance BIG TV Ltd, Tata Sky Ltd, Videocon d2h Ltd, Sun DirectTV Pvt. Ltd and Bharti Telemedia Ltd. State broadcaster Doordarshan also runs a DTH platform for free-to-air channels called DD Free Dish.

“It’s a welcome move for us,” said an executive at a DTH company who declined to be named. “We needed relief on the licence fee.” He said DTH operators had been paying annual fee on gross revenue, which includes service tax and entertainment tax that is later paid to the government. “We signed up for a 10% fee when there was no service and entertainment tax. But now we have to pay these taxes as well. DTH firms are being taxed both at centre and at the state level.” Jehil Thakkar, head (media and entertainment) at consulting firm KPMG, said the move is a positive development for the finances of DTH firms. “This is a sector which has struggled financially for so many years and this change will accelerate its journey to profitability,” said Thakkar. In 2016-17, the I&B ministry earned Rs.747.78 crore from DTH firms as annual licence fee, according to a written reply submitted in the Lok Sabha by the minister of state for I&B, Rajyavardhan Rathore. In the past three financial years, the government has collected Rs.2,400.45 crore as DTH licence fee, Rathore said in the written reply.