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Trai Recommends Extension of Licence Period for DTH Operators

Trai Recommends Extension of Licence Period for DTH Operators

By Press Trust of India | Updated: 23 July 2014 20:02 IST

Broadcast regulator Trai on Wednesday recommended extension of licence period of direct-to-home (DTH) operators to 20 years, while proposing bringing down fees to 8 percent of the adjusted gross revenue.

In its recommendations on a new DTH licensing regime, the Telecom Regulatory Authority of India (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 existing licence fee from 10 percent of gross revenue (GR) to 8 percent 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 also suggested giving liberty to the existing DTH operators to "migrate to the new regime at any time during their currency of their existing licenses".

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

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

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

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 percent 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 percent of its capacity for channels of its vertically integrated broadcaster.

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