Dish TV urges TRAI to re-iterate 2004 recos on rationalisation of DTH licence fee

MUMBAI: Direct to home (DTH) operator Dish TV India has urged the Telecom Regulatory Authority of India (TRAI) to reiterate its October 2004 recommendations on rationalising licence fee for the DTH players.

In a letter to TRAI chairman RS Sharma, Dish TV CMD Jawahar Goel has requested the TRAI to issue the necessary recommendations to the government before it comes out with the new DTH policy.

Goel noted that the DTH operators have been incurring heavy cost for the provision of services. Not only the DTH services taxes to the tune of 33% but also pay around 30-35% of their revenue as the content cost.

The letter stated that the government had already taken a decision, which was reflected in the letter dated 17.03.2008 of the ministry of information and broadcasting (MIB), that the licence fee shall be charged at 6% of the gross revenue (GR). It was also noted that the TRAI had also endorsed the above-mentioned decision of the government which is reflected in its letter dated 15/4/2008 to the MIB.

The TRAI in its recommendations on ‘Issues relating to Broadcasting and Distribution of TV Channels’ had called for a 2% reduction in the licence fee for DTH in line with the reduction in the license fee given for other telecom operators.

It had also recommendated that the principle of application of license fee on the Adjusted Gross Revenue (AGR) as in the case of telecom may also be followed.

The AGR in case of DTH service will be based on the total revenue excluding subscription fee charges passed on to the pay channel broadcasters, sale of hardware including Integrated Receiver Decoder required for connectivity at the consumer premise, and service/entertainment tax actually paid to the Central/State Government, if gross revenue had included them.

Further, the letter stated that the TRAI in its recommendation dated 23/7/2014 has stated that the licence fee payable by the DTH Operators should be 8% of the Adjusted Gross Revenue (AGR) where AGR is to be calculated by excluding Service Tax, Entertainment Tax and Sales Tax/VAT actually paid to the Government.

Goel noted that the change in the position of TRAI though was a shift from its earlier stand of payment of license fee on AGR, however, it had been recognised that DTH operators should be given some level playing field as compared to its competitors since the effective license fee by this method would have almost remained the same as was in the case of 8% of AGR.

He further stated that the Interconnection Regulations, 2017 and Tariff Order, 2017 as notified by the TRAI vindicate as well as substantiate the company’s request that the content fee collected for and paid to the Broadcasters must be allowed as a deduction while calculating the DTH License Fee.

In the new regime, the role of the distribution platforms will be limited to the extent of a pipe/network through which the channels/bouquets will be offered to the consumers.

“It is clear from the above that such collection being done by the DTH Industry shall be on behalf of the Broadcasters and such charges therefore certainly deserves to be treated as a “pass-through item” for the purpose of determination of the License fee which is required to be paid by the DTH Operators to the Government of India,” Goel said in the letter to TRAI.

He also stated that the logic of pass-through items as followed in the telecom industry should be applied for DTH also. “Unfortunately, the recommendations made by TRAI till date in respect of the License fee payable by the DTH operators, however, did not consider this fact. We, therefore, request you to kindly re-iterate your recommendations dated October 01, 2004 on the ‘Issues relating to Broadcasting and Distribution of TV channels’,” Geol lamented.

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