Airtel Digital TV, Tata Play & Others Under Govt Radar Over Licence Fee

The central government has asked for a special audit of six direct-to-home (DTH) service operators-Airtel Digital TV, Tata Play, Dish TV, Sun Direct, Videocon’s D2H TV and Big TV that are in a legal dispute with the Information and Broadcasting (I&B) ministry over license fees. 

This week, the I&B ministry wrote to the Comptroller and Auditor General (CAG) of India demanding an audit of all six DTH providers going back to the year when they were granted licenses by the Centre, reported by The  Economic Times.

The I&B ministry has further asked the CAG to ensure that the license fees submitted by the said DTH providers are aptly assessed and collected.

Audit To Check Revenue Computation Discrepancies

The move is reportedly taken to examine discrepancies in revenue computation done by DTH service providers, which have a cumulative user base of over 68 Mn. 

It is imperative to note that the DTH service providers need to pay 8% of their annual gross revenue as licensed fees to the central government.

Between 2003 and 2007, the Centre granted six DTH licenses. However, at present, only four DTH operators–Airtel Digital TV, Tata Play, Dish TV and Sun Direct are offering services in the country while the remaining two companies have ceased their services. 

Also, it is not the first time when the I&B ministry is scrutinising the license fees paid by the DTH operators. In 2020, the ministry issued a notice worth INR 4,164 Cr to Essel Group owning Dish TV thereby, demanding payment of license fees and interest since DTH operator’s inception (2003).

In May, DTH operators had urged the Centre to waive their license fees owing to the gradual decline of their user base. 

In the financial year 2023, revenues collected from DTH license fees coupled with commercial TV services, FM radio etc are expected to increase by over INR 1,000 Cr.

The development has come a few days after DTH provider Tata Play introduced its over-the-top (OTT) app named Tata Play Binge for Tata Play DTH subscribers. It presently offers 17 streaming services and games. 

According to a Statista report, in the first half of 2021, Tata Sky recorded the highest share with 33% in the domestic DTH market followed by Airtel Digital TV (25.7%), Dish TV (23.45%) and Sun Direct TV (17.41%). 

DTH Providers Foraying OTT Space

A few days ago, Zee Group-owned DTH operator Dish TV introduced its OTT platform named Watcho to bolster its overall digital content consumption. 

In 2017, Sun Direct rolled out its OTT platform called Sun NXT offering content in four South Indian languages–Tamil, Telugu, Malayalam and Kannada. 

At present, OTT players including Netflix, Amazon Prime Video, ALTBalaji, MX Player and Disney+ Hotstar, among others are dominating the Indian market. 

According to a report , the Indian OTT market is expected to grow to $13-$15 Bn by 2032. The industry is likely to expand at a CAGR of over 20% by the forecasted period of 2032. 

The report further revealed that in 2022, the industry has 102 Mn paid OTT users. The number is however set to increase at a CAGR of 17% reaching 224 Mn by 2026. 

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