SUMMARY
In its recommendations, TRAI suggested that the licence fee for DTH operators should be brought down to zero in the next three years
Currently, DTH players pay a licence fee equivalent to 8% of adjusted gross revenue (AGR) on a quarterly basis
Before the fee is scrapped altogether, the sector regulator has recommended bringing the licence fee down to 3% of the AGR
The Telecom Regulatory Authority of India (TRAI) has recommended discontinuing charging direct-to-home (DTH) operators a licence fee after the financial year 2026-27 (FY27) to ensure long-term sector viability.
In its recommendations to the Ministry of Information and Broadcasting (MIB) titled ‘Licence Fee and Policy Matters of DTH Services’, TRAI has suggested that the licence fee for DTH operators should be brought down to zero in the next three years.
Currently, DTH players pay a licence fee equivalent to 8% of adjusted gross revenue (AGR) on a quarterly basis. Prior to completely eliminating the fee, the regulatory authority has suggested reducing the license fee to 3% of the AGR.
The licence fee reduction will improve cash flow in the sector, which has been struggling to keep up with competitors. TRAI noted that DTH platforms should be treated at par with other regulated and unregulated distribution platforms, including multi-system operators (MSOs), headend in the sky (HITS) operators, IPTV providers, DD Free Dish and OTT services.
All of these platform players don’t pay a licence fee, TRAI said.
In the last few years, the DTH sector has been losing ground to DD Free Dish, the free DTH platform of Prasar Bharati and OTT platforms. According to TRAI, as of March 2023, the active subscriber base of the four pay DTH platforms stood at 66.62 Mn.
The DTH sector has been advocating for a level playing field between DTH and other distribution platforms concerning license fees.
According to industry estimates, private DTH operators currently contribute over INR 1,000 Crores annually in license fees. Additionally, they are reportedly facing a shortfall of around INR 7,000-8,000 Crores in terms of license fees, as per industry estimates.
TRAI also highlighted that if the applicable gross revenue (ApGR) incorporates GST, then the adjusted gross revenue (AGR) should be calculated by excluding the GST amount paid to the government from the ApGR. The regulatory authority also recommended that the Ministry of Information and Broadcasting should establish a reliable method for validating deductions through a centralised portal.
“In the highly competitive television distribution market, urgent measures are required for the DTH sector. The quick implementation of these recommendations will help the sector and enable all-round growth,” TRAI said.
TRAI’s suggestions come months after it issued a consultation paper, seeking input from stakeholders regarding the licence fee and bank guarantee requirements for DTH operators. This consultation was prompted by a referral from the Ministry of Information and Broadcasting (MIB).
