MIB's silence on TRAI's licence fee reduction suggestion keeps DTH sector hanging
Last year, TRAI recommended that DTH operators should pay a licensing fee of 3% instead of 8% on their AGR
Despite the Telecom Regulatory Authority of India’s (TRAI) recommendation a year ago to charge direct-to-home (DTH) operators a licensing fee of 3% instead of 8% on their Adjusted Gross Revenue (AGR), the industry remains in limbo. The Ministry of Information and Broadcasting (MIB) is yet to confirm or implement this policy, leaving the sector in a state of uncertainty, industry sources told exchange4media.
Anxious over the MIB’s silence on the matter, the DTH industry has repeatedly approached the ministry for the implementation of the licensing fee recommendation.
“We have been approaching the ministry for implementation of the TRAI licensing fee recommendation but have not got any response or confirmation from them,” said an official, representing one of the four DTH players, who did not wish to be named.
Another senior industry expert said that TRAI has recommended reduction of the licensing fee from 8% of the AGR to 3% and ultimately waive it off by FY 2027.
“It has been a year but we are still waiting for the Ministry of Information and Broadcasting to respond to it. It is frustrating, but what can we do,” said the expert.
In August 2023, TRAI released its ‘Recommendations on License Fee and Policy Matters of DTH Services’, in which it held that the DTH Licensees should pay an annual license fee equivalent to 3% of Adjusted Gross Revenue (AGR).
As per TRAI, AGR represents the revenue produced by the licensee’s main business operations by eliminating specific income sources and the GST amount actually paid to the government, thereby arriving at a transparent computation of AGR for DTH licensees.
At present, there are four pay DTH operators providing television services through addressable systems in the country- Tata Play Ltd, Bharti Telemedia Ltd, Dish TV India Ltd and Sun Direct TV Pvt Ltd.
The ‘DTH 2020 Amendment’ prescribed an annual License Fee at the rate of 8% of its AGR, to be paid on a quarterly basis to MIB. The AGR is calculated by excluding Goods and Service Tax (GST) actually paid to the Government from the Gross Revenue (GR) of the Licensee.
As per TRAI, the Gross Revenue includes subscription fee, installation, activation, restoration, reactivation, relocation, visiting and other service charges, subscription and advertising revenue from platform services channels, carriage fees, revenue from marketing and placement agreements, commissions received, revenue from sale, repair and maintenance of customer premises equipment, royalties, revenue from customer support service and any other revenue of the enterprise.
Another DTH operator has also written to the ministry to exclude taxes from computation of license fees for which a formal response is still awaited from the MIB.
Recently, the DTH sector has been facing tough competition from DD Free Dish, the free to air service of Prasar Bharati, and OTT platforms.
The DTH industry has lost nearly 8 million subscribers in the last three years according to TRAI data published recently.
Since 2021, the number of subscribers for the four major DTH players has reduced by nearly 7.6 million according to TRAI’s report- Indian Telecom Services Yearly Performance Indicators 2023-24. According to the report, the active subscriber base for these providers was 61.97 million as of March 31 2024, down from 69.57 million as of March 31, 2021.
