Trai agrees with I&B ministry to reduce DTH cos’ licence fee

Corporate Bureau
Posted online: Thursday , April 17, 2008 at 22:10 hrs
Updated On: Thursday , April 17, 2008 at 22:10 hrs

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The Telecom Regulatory Authority of India (Trai) has concurred with information and broadcasting (I&B) ministry’s view to reduce the licence fee of DTH players to 6% of their gross revenue from the existing 10%. Trai had earlier recommended that in view of convergence with telecom sector the licence fee of DTH players be reduced to 8% of their adjusted gross revenue (AGR) instead of gross revenue.

However, the I&B ministry had taken the view that changing the basis of calculation (from the existing gross revenue to adjusted gross revenue) may enable some companies to conceal their actual shareable revenue reducing the transparency of the overall system. The ministry also pointed out that Trai itself has recommended gross revenue as the basis of calculation in other broadcasting services such as Mobile TV. Hence the ministry was of the opinion that reducing the license fee of the DTH players to 6% of gross revenue instead of 8% of AGR will be broadly in line with proposal of the regulatory body in terms of actual revenue accruals to the government.

The ministry felt that this will ensure ease of calculation and provide less scope for manipulation of revenue figures. However, how much of this fee reduction will passon to the consumer is uncertain. While most of the DTH players consider this reduction in fee a welcome step and accept making DTH services affordable will be the key to capture larger market share, they were non committal in spelling out a price cut in the DTH services. “While making the services affordable and accessible is the key priority one must understand that the DTH industry is still in the infancy stage and bleeding. We are still trying to make up our budgeted losses. However, it is too premature to comment on how the license fee cut will affect the pricing,” said Vikram Kushik, CEO , Tata Sky.

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Trai agrees with I&B ministry to reduce DTH cos’ licence fee

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