Revised guidelines bring a note of positivity for DTH sector

DTH licenses will now be issued for a period of 20 years


KOLKATA: The government has finally clarified the uncertainties in DTH licensing norms. According to new guidelines, DTH licenses will now be issued for a period of 20 years. Although the latest move may not be game changing for the operators, it has definitely brought a sense of positivity to the sector.

“We are grateful to Shri Javadekar for resolving the long standing impasse on the DTH License policy which will provide certainty to the sector. We look forward to a level playing field via parity of Licence Fee with Cable TV which too is Licensed by MIB and follows the same prices and margins as regulated by TRAI’s NTO,” Tata Sky MD& CEO Harit Nagpal said.

I&B minister Prakash Javadekar stated on Wednesday that changes have been approved for 100 per cent foreign direct investment (FDI) in the DTH sector which was limited to 49 per cent. He also added that the decision was taken earlier by the ministry of commerce and industry but the sector could not avail the benefits due to existing MIB guidelines.

Moreover, DTH license will be issued for 20 years and license fee will be collected quarterly. Further, the period of license may be renewed by 10 years at a time. The cabinet has also approved the sharing of infrastructure between DTH operators. Distributors of TV channels will be permitted to share the common hardware for their subscriber management system (SMS) and conditional access system (CAS) applications. Javadekar said that the decision has been taken to create level playing field.

Another expert from a DTH company who preferred to be anonymous added that the latest decision would streamline license agreements. He added that anybody who would like to invest in the DTH companies would get a sense of certainty with the longer license period which was getting affected with the 10-year license term. A senior industry expert added that the FDI has been allowed because the sector is dying as the companies are turning into loss-making entities, with streaming of video taking off exponentially in India. Says he: "Internationally companies which invested in DTH platforms are today saddled with diminishing returns on their investments. They are looking at buyers - whether Sky in the UK or Direct TV in the US.  Here, theIndian  government hopes to eject some equity in the DTH sector so as to stimulate investment and hence growth,  in the sector "

“Overall it's better for the DTH sector, which plays a big role in digitising India. Giving them a certainty for licensc that it would be there for 20 years, will help them to invest more and grow the market. Also, the saving of two per cent AGR, will help them to improve their profitability,” EY India partner and media & entertainment leader Ashish Pherwani said.

Moreover, license fee has been revised from 10 per cent of GR to 8 per cent of AGR. Elara Capital VP research analyst (media) Karan Taurani added that it is mild positive due to reduction in license revenue. He also added that Dish TV may find its potential buyer post-announcement.

India’s DTH subscriber base grew by 3.2 lakh during the April-June quarter, as per the Indian Telecom Services Performance Indicators April-June 2020 by the Telecom Regulatory Authority of India (TRAI). The sector saw better, albeit marginal growth compared to the January-March quarter. Currently, pay DTH subscriber stands at 70.58 million, compared to 70.26 million in the previous quarter. At the end of 2019, pay DTH subscriber base was 69.98 million.

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