20-year licence for DTH operators mooted

Recommends cut in existing licence fee to 8 % of adjusted gross revenue

July 23, 2014 11:44 pm | Updated 11:44 pm IST - NEW DELHI:

In its recommendations on a new DTH licensing regime, TRAI said vertically integrated broadcasters must be subjected to a set of additional regulations, allowing them to control only one distribution platform operators (DPOs).

In its recommendations on a new DTH licensing regime, TRAI said vertically integrated broadcasters must be subjected to a set of additional regulations, allowing them to control only one distribution platform operators (DPOs).

The Telecom Regulatory Authority of India (TRAI), on Wednesday, recommended extension of the licence period of direct-to-home (DTH) operators to 20 years, while proposing bringing down fees to 8 per cent of the adjusted gross revenue.

In its recommendations on a new DTH licensing regime, TRAI said vertically integrated broadcasters must be subjected to a set of additional regulations, allowing them to control only one distribution platform operators (DPOs).

Vertically integrated broadcasters are entities which run TV channels as well as distribution platforms as MSO and DTH.

On the tenure of DTH licence, TRAI suggested that it to be increased from 10 years to 20 years, renewable by 10 years at a time.

To bring parity with telecom operators in terms of licence fee with the DTH operators, TRAI also recommended a reduction in the existing licence fee from 10 per cent of gross revenue (GR) to 8 per cent of the adjusted gross revenue (AGR).

The sectoral regulator also recommended a one-time entry fee of Rs.10 crore for the DTH industry.

Moreover, TRAI has suggested giving liberty to the existing DTH operators to “migrate to the new regime at any time during their currency of their existing licences.’’

The DTH operators are paying 10 per cent of their GR, while the telecom operators pay only 8 per cent of their AGR.

Under the AGR method, revenues arising out of other activities such as interest on savings, dividends, bundling of handsets and others are excluded for calculating the licence fee.

TRAI has also suggested the Bureau of Indian Standards to come out with updated specifications for the set-top-boxes (STBs) in consultation with the regulator.

Cross holdings On the issue of cross holdings in the broadcasting and the distribution sectors, TRAI said there was a need to bring ‘uniformity’ in the sector. “Comprehensive definition of ‘control’ to be uniformly adopted in all segments of broadcasting and distribution sectors,” it recommended.

It has also suggested for additional set of regulations for vertically integrated broadcasters and DPO. Moreover, it also said that a vertically integrated broadcaster should be permitted to take control of only one DPO.

TRAI also said that a “vertically integrated DPO to be restricted from controlling any other DPO of other category in the relevant market” and “not to be permitted to acquire more than 33 per cent of the market share.’’ The sectoral regulator has also suggested that a vertically integrated DPO should declare its channel carrying capacity and not to reserve more than 15 per cent of its capacity for channels of its vertically integrated broadcaster.

Carriage fee Over the carriage fee charged by the DPOs from broadcasters to put their channels on their network, TRAI has suggested them to publish the access fees for it.

“The charging of the access fee should be on non-discriminatory basis,” said TRAI.

It also called for distinguishing between the DTH and cable TV providers, Multi System Operators (MSOs) and Headend in the Sky (HITS). It suggested DTH would have a national market, while the latter would have State-wise.

“Relevant market for DTH would be the entire country and for MSI/HITS — State,” TRAI said.

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