DTH license to be issued for 20 years, 100% FDI allowed in the sector

KOLKATA: The ministry of information and broadcasting (MIB) announced major key decisions for the direct-to-home (DTH) segment on Wednesday. The cabinet has revised guidelines for providing DTH service in India as well as licensing norms.

I&B minister Prakash Javadekar stated in a briefing that 100 per cent foreign direct investment (FDI) will be allowed for the DTH sector. 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 licenses 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 a level playing field.

The other salient features of the decision are:

DTH operators shall be permitted to operate to a maximum of five per cent of their total channel carrying capacity as permitted platform channels. A one-time non-refundable registration fee of Rs 10,000 per platform service channel shall be charged from a DTH operator.

The cap of 49 per cent FDl in the existing DTH guidelines will be aligned with the extant government (DPIIT's) policy on FDl as amended from time to time. The decision will come into effect as per revised DTH guidelines issued by the ministry of information and broadcasting.

"The proposed reduction is intended to align the license fee regime applicable to telecom sector and will be prospectively applied. The difference may also enable DTH service providers to invest for more coverage leading to increased operations and higher growth and thereby enhanced and regular payment of license fee by them. Registration fee for platform services is likely to bring a revenue of approximately Rs 12 lakh. Sharing of infrastructure by the DTH operators may bring in more efficient use of scarce satellite resources and reduce the costs borne by the consumers. Adoption of the extant FDI policy will bring in more foreign investment into the country," the government said in a press statement. 

The authority also added that the DTH sector is a highly employment intensive sector that operates pan-India. It directly employs DTH operators as well as those in the call centres, besides indirectly employing a sizeable number of installers at the grass-root level. The amended guidelines, with longer license period and clarity on renewals, relaxed FDI limits, etc will ensure a fair degree of stability and new investments in the DTH sector along with employment opportunities.