(16 April 2008 6:30 pm)

NEW DELHI: The Telecom Regulatory Authority of India (Trai) today said it supports the Information & Broadcasting ministry's proposal to reduce the DTH (direct-to-home) license fee to six per cent of the gross revenue.

The I&B Ministry had recommended to reduce the license fee from 10 per cent to 6 per cent.

"Trai has concurred with the I&B ministry proposal for maintaining the concept of gross revenue for license fee. The ministry's proposal for granting concession of four per cent from the present level of 10 per cent of gross revenue as license fee has also been accepted as it was felt that the gross revenue concept for license fee would make a case for higher relief," a Trai statement said.

Trai in its earlier recommendations had advised that Adjusted Gross Revenue (AGR) should be the basis for realising license fee.

The sector regulator had also recommended reduction in license fee from 10 per cent to eight per cent.

However, Trai has now reconsidered its position in the context of communication received from the ministry of information and broadcasting.

Trai has noted that the DTH service providers as well as other broadcasting service providers are paying license fee as a percentage of the gross revenue.

Trai says it now appreciated that I&B Ministry may have to scrutinise all the details, including pass through deductions, which could be time consuming and also require additional skilled staff.

Therefore, Trai says it expects that the lower license fee would ensure higher growth rate and would therefore, not affect the overall revenue collection.

"It is expected that this amendment to the existing license condition while leading to a healthy competition among the DTH operators as well as with other delivery platforms will also bring considerable benefit to the consumers," Trai has said.