DTH companies seek uniform licence fee policy

Mumbai: Direct-to-home (DTH) companies Tata Sky and Dish TV have again raised concerns over what they termed discriminatory policies, and demanded a uniform licence fee and a level playing field for the entire distribution sector, collectively called distribution platform operators (DPOs).
The DTH sector has been asking for a rationalisation of licence fee, which is currently 10% of their gross revenues. Cable TV and headend-in-the-sky operators don’t have to pay any licence fee.

“When all DPOs have to pay uniform GST, why can’t there be a unified licence fee structure too,” Dish TV chairman Jawahar Goel asked.

When DTH was launched in India in 2004, cable TV was predominantly an analogue service with no addressability. It took almost 12 years for the government to implement digitisation — first a conditional access system and later digital addressable system.

With the digital system, the government also mandated licencing of multi-system operators.

“Digitisation and the new tariff order were envisaged to create a more transparent industry with a level playing field,” Tata Sky managing director Harit Nagpal said. “But during this process, some key issues remained unaddressed. While we continue to pay 10% of our top line as part of licence fee, cable TV, which is still a larger part of the business, has no licence fee. It’s like we are being taxed for being more efficient. We have been patient for over 10 years, but now when the product is the same, why are we being asked to pay more?”

Both Goel and Nagpal said the DTH association as well as individual players had made representations to the government and the Telecom Regulatory Authority of India that regulates the sector, but still there were no clear answers.
While the DTH industry has been paying 10% of their gross revenues in licence fee since its inception, cable TV operators have never been charged any licence fee as it is a more capex-intensive business as they have to lay fibre till the users’ house.

However, the DTH operators also have to pay for leasing the transponders, which too is regulated by the government.

“There should be parity, but the policy needed to be framed keeping the long-term vision,” said a media consultant. “Basic fundamental difference between cable and DTH is that cable has to invest in laying wire, but DTH also has to pay a pretty prohibitive cost of leasing transponders on the satellites”.

In fiscal 2020, the top three DTH players (Tata Sky, Dish TV and Airtel Digital TV) have paid more thaan Rs 4,750 crore in licence fee alone.

“This licence fee can kill the industry,” Tata Sky’s Nagpal said. “All we are asking for is a unified policy. Tax both cable and DTH at 4% and the government’s collections also won’t go down and there will be a level playing field.”