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Thursday, August 18, 2016

DTH Norms Set for Tweak

The information and broadcasting ministry is set to change licensing norms for direct-to-home television operators by increasing the validity period of their licences and reducing the annual fee to draw more players into the sector.Officials said the ministry had "broadly accepted" the recommendations of the Telecom Regulatory Authority of India (Trai), which had proposed doubling the licence duration of DTH firms to 20 years and cutting their annual fee to 8 per cent of their gross revenue earnings.

DTH firms now pay an annual fee equivalent to 10 per cent of their gross revenues and the licence is valid for 10 years, an I&B ministry official said. "DTH operators also need to pay an initial non-refundable entry fee of Rs 10 crore."The ministry, the official added, has "accepted the Trai recommendations and the DTH guidelines with the approval of the cabinet".In July 2014, Trai had reviewed the existing DTH policies after being asked by the ministry to come up with recommendations for extending licences.Apart from suggestions to change the licence duration and lower the annual fee, Trai had submitted recommendations on curbing cross-holding in broadcasting and distribution services which would allow one broadcaster to control only one distribution platform - either a DTH firm or a cable company.

India has six private DTH firms: the 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. The state broadcaster, Doordarshan, also runs a DTH platform for free-to-air channels known as DD Free Dish."This is a welcome move for us," said an executive at a DTH company who did not wish 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 per cent 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 the Centre and at the state levels."

A senior executive with another DTH operator said the move is expected to help the finances of DTH firms. "This is a sector which has struggled financially for so many years and such a change will accelerate its journey to profitability," she said.The I&B ministry earned Rs 747.78 crore from DTH firms as annual licence fee in fiscal 2015-16, according to a written reply submitted in the Lok Sabha by junior minister Rajyavardhan Rathore in this session.The government has collected Rs 2,400.45 crore as DTH licence fees over the past three years, the minister had also submitted in the House.

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