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MUMBAI: The Telecom Regulatory Authority of India(TRAI), last week, came out with the much needed recommendation paper on new DTH licences.The issue had come into light when India’s oldest DTH operator Dish TV was nearing the end of its 10 year licence
that was given to it when it started operating.
While the need for fresh and transparent rules
came up, TRAI issued a consultation paper in
October 2013 and it was just last week that it
came up with its recommendation paper on
the same. What most DTH operators were glad
about was the reduction in the annual licence
fee from 10 per cent of gross revenue (GR) to
8 per cent of adjusted gross revenue (AGR).
This would mean that the DTH industry in all
will save around Rs 200 crore to Rs 300 crore.
The AGR is calculated after deducting service
tax, sales tax and entertainment tax from the
GR. TRAI states that since there has been
growing convergence of telecom and
broadcast, the 8 per cent is aligned to the
unified licence (UL) in the telecom field. The
recommendation paper states that in the UL,
AGR is arrived at by excluding taxes and
charges of ‘pass through’ nature. Even though
TRAI states that there is no such charge of
‘pass through’ nature for DTH players, the
latter disagrees.
“We were hoping for either a 6 per cent of
AGR or 8 per cent of AGR with ‘pass through’
of content cost,” says Videocon d2h CEO Anil
Khera. When a few months ago, the Ministry
had sent notices to all the DTH operators to
pay the licence fee dues, they had taken the
issue to court. Tata Sky CEO Harit Nagpal had
then said that the Ministry of Information and
Broadcasting had itself asked the Finance
Ministry to reduce the fee from 10 per cent to
6 per cent.
The paper says that two DTH operators had
recommended that for calculating AGR,
deduction should be made for not just service
tax, sales tax and entertainment tax, but also
for content costs, transponder costs, hardware
sales revenue etc.
Dish TV CEO and soon to be DTH Operators
Association president RC Venkateish says that
the fight for exclusion of content cost isn’t
over yet. He says, “We will approach the
Ministry of Information and Broadcasting to
press for content cost to be excluded from the
AGR. Like we had said, either it should be
removed or else the licence fee should be
brought down to 6 per cent of AGR instead of
the recommended 8 per cent of AGR.”
The parliament was told in April 2013 that six
private DTH operators paid Rs 307.8 crore as
licence fee to the government for the year
2011-12. According to figures furnished in the
reply to the Parliament, Tata Sky paid licence
fee of Rs 79.3 crore in 2011-12 as against
Airtel Digital’s Rs 61.87 crore and Dish TV’s Rs
30 crore. Sun Direct paid Rs 36 crore, Reliance
Big TV paid Rs 9.5 crore, and Videocon d2h
paid Rs 5 crore.
For now, the recommendations are pending
with the Ministry for approval. http://www.indiantelevision.com/regulators/trai/dth-ops-plea-exclude-content-cost-from-agr-140728
that was given to it when it started operating.
While the need for fresh and transparent rules
came up, TRAI issued a consultation paper in
October 2013 and it was just last week that it
came up with its recommendation paper on
the same. What most DTH operators were glad
about was the reduction in the annual licence
fee from 10 per cent of gross revenue (GR) to
8 per cent of adjusted gross revenue (AGR).
This would mean that the DTH industry in all
will save around Rs 200 crore to Rs 300 crore.
The AGR is calculated after deducting service
tax, sales tax and entertainment tax from the
GR. TRAI states that since there has been
growing convergence of telecom and
broadcast, the 8 per cent is aligned to the
unified licence (UL) in the telecom field. The
recommendation paper states that in the UL,
AGR is arrived at by excluding taxes and
charges of ‘pass through’ nature. Even though
TRAI states that there is no such charge of
‘pass through’ nature for DTH players, the
latter disagrees.
“We were hoping for either a 6 per cent of
AGR or 8 per cent of AGR with ‘pass through’
of content cost,” says Videocon d2h CEO Anil
Khera. When a few months ago, the Ministry
had sent notices to all the DTH operators to
pay the licence fee dues, they had taken the
issue to court. Tata Sky CEO Harit Nagpal had
then said that the Ministry of Information and
Broadcasting had itself asked the Finance
Ministry to reduce the fee from 10 per cent to
6 per cent.
The paper says that two DTH operators had
recommended that for calculating AGR,
deduction should be made for not just service
tax, sales tax and entertainment tax, but also
for content costs, transponder costs, hardware
sales revenue etc.
Dish TV CEO and soon to be DTH Operators
Association president RC Venkateish says that
the fight for exclusion of content cost isn’t
over yet. He says, “We will approach the
Ministry of Information and Broadcasting to
press for content cost to be excluded from the
AGR. Like we had said, either it should be
removed or else the licence fee should be
brought down to 6 per cent of AGR instead of
the recommended 8 per cent of AGR.”
The parliament was told in April 2013 that six
private DTH operators paid Rs 307.8 crore as
licence fee to the government for the year
2011-12. According to figures furnished in the
reply to the Parliament, Tata Sky paid licence
fee of Rs 79.3 crore in 2011-12 as against
Airtel Digital’s Rs 61.87 crore and Dish TV’s Rs
30 crore. Sun Direct paid Rs 36 crore, Reliance
Big TV paid Rs 9.5 crore, and Videocon d2h
paid Rs 5 crore.
For now, the recommendations are pending
with the Ministry for approval. http://www.indiantelevision.com/regulators/trai/dth-ops-plea-exclude-content-cost-from-agr-140728
