SARAVANA RAMESH
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MUMBAI: Direct-to-home (DTH) operators have urged the Telecom Regulatory of India (TRAI) to increase their licence period from the current 10 years. While Dish TV and Videocon d2h have requested the sector regulator to increase the validity of DTH licences for a period of 15 years, others like Airtel Digital TV, Sun Direct and Reliance Digital TV want the permission to last for 20 years.
Responding to TRAI’s consultation paper on issue of extension of DTH licence, the DTH operators have also pressed the regulator to have an automatic licence renewal clause in the DTH guidelines. Airtel Digital TV has suggested that the authority should increase the validity period to 20 years through an amendment in the licences instead of issuing a new one.
The licence agreement must be a provision for renewal of validity of 10 years at one time in the future, Airtel Digital TV added. Videocon d2h has suggested that the minimum period of DTH licences for the existing licencees should be 15 years with a renewal clause built-in in the licence agreement.
Dish TV is of the opinion that the existing DTH licencees should be given a licence with a validity of 15 years. Further, an appropriate amendment should be made in the DTH guidelines, prescribing a period of 15 years for the renewal of the DTH licences on their expiry.
Reliance Digital TV and Sun Direct have said that licence period for DTH operators should be the same as that for unified licencees, which is 20 years. DTH, it said, is a “bearer service” similar to the service provided under unified licence.
The existing DTH guidelines provide for the issue of a licence for 10 years. However, they do not explicitly provide for an extension or a renewal, implying that at the end of the 10-year period of validity, the licence expires. This leaves the DTH operators in a state of quandary.
A 10-year period, DTH operators contend, is too short a time for a customer-centric service like DTH since it creates uncertainty in business model and inhibits futuristic business plans like deploying new technology or long term capacity enhancement.
Additionally, a DTH service not only requires huge investments at the time of setting up the infrastructure at the operator end but also at subsequent stages of operations as huge subsidies are pumped in to acquire customers. DTH projects also have a long gestation period and in the Indian context the wait to attain profitability is even longer due to the increasing burden on the operators and their inability to hike rates of packages due to cut throat competition. Needless to mention that if there is no certainty of continuation after the expiry of initial licensing term, the entire investment made may be exposed to the risk of getting jeopardised in the event of non-renewal, said Dish TV in its reply.
The DTH operators have also stated that the entry fee of Rs. 10 crore (Rs 100 million) should not be payable again for the extension of validity period of the DTH licences. They argue that the entry fee is generally applicable only to new players. The objective of having an entry fee, after all, is to establish the bonafide of service providers. It is also used as a means to keep non-serious players out. DTH operators feel that the value of bank guarantee should be kept at Rs. 40 crore (Rs 400 million).
The bank guarantee, according to TRAI, is a safeguard against non-payment of licence fee and violation of licence conditions by the licencee. However, Airtel Digital TV contended that there should not be any bank guarantee for existing DTH operators during increase in the validity period of their licence. Notwithstanding the above, bank guarantee should be reduced to 50 per cent of the existing bank guarantee of Rs. 40 crore (Rs 400 million).
Videocon d2h is of the opinion that the bank guarantee needs to be refurbished once the period of licence expires. However, it said that the quantum of bank guarantee should not be increased. The existing DTH players have proved themselves and there has not been a single occasion in the last decade when the bank guarantee had to be invoked, Videocon d2h said.
Dish TV has suggested that the need to continue with the bank guarantee should be dispensed with keeping in view that all the DTH operators have been operational for a considerable length of time. The present quantum of bank guarantee should be maintained and the same needs to be restored once the period of licences expired, said Reliance Digital TV.
Sun Direct opined that the existing DTH operators should be required to renew their bank guarantees at the time of renewing licence. The DTH operators have also urged TRAI to implement the information and broadcasting ministry’s decision and its recommendation dated 15 April 2008 to reduce the licence fee from 10 per cent to 6 per cent. Considering multiple taxation, investment and huge losses, the DTH operators have said that licence fees should be charged on Adjusted Gross Revenue (ADR) instead of Gross Revenue to bring it on par with telcos.
Additionally, Dish TV has urged TRAI to modify the License Agreement by allowing licensees to take DTH Ku-band capacity directly from foreign satellite operators on any satellite which has been coordinated with the Department of Space (DoS). The capacity lease should be permitted in the FSS or BSS bands or in any planned band which has been coordinated with ISRO, it said. Dish TV also demanded that VAS services including two-way connectivity, mail, browsing and Internet streaming should be permitted from DTH terminals using satellite uplinks and downlinks.
Airtel Digital TV submitted that DTH operators should be allotted additional bandwidth within the same orbital slot to cater to the technical requirement. Lack of capacity effectively denies DTH operators the opportunity to provide more channels to customers and be an effective alternative to cable who are not dependent on transponders to carry channels, it said.
Read more at: DTH ops urge TRAI to increase licence validity period | TelevisionPost.com | TelevisionPost.com
Responding to TRAI’s consultation paper on issue of extension of DTH licence, the DTH operators have also pressed the regulator to have an automatic licence renewal clause in the DTH guidelines. Airtel Digital TV has suggested that the authority should increase the validity period to 20 years through an amendment in the licences instead of issuing a new one.
The licence agreement must be a provision for renewal of validity of 10 years at one time in the future, Airtel Digital TV added. Videocon d2h has suggested that the minimum period of DTH licences for the existing licencees should be 15 years with a renewal clause built-in in the licence agreement.
Dish TV is of the opinion that the existing DTH licencees should be given a licence with a validity of 15 years. Further, an appropriate amendment should be made in the DTH guidelines, prescribing a period of 15 years for the renewal of the DTH licences on their expiry.
Reliance Digital TV and Sun Direct have said that licence period for DTH operators should be the same as that for unified licencees, which is 20 years. DTH, it said, is a “bearer service” similar to the service provided under unified licence.
The existing DTH guidelines provide for the issue of a licence for 10 years. However, they do not explicitly provide for an extension or a renewal, implying that at the end of the 10-year period of validity, the licence expires. This leaves the DTH operators in a state of quandary.
A 10-year period, DTH operators contend, is too short a time for a customer-centric service like DTH since it creates uncertainty in business model and inhibits futuristic business plans like deploying new technology or long term capacity enhancement.
Additionally, a DTH service not only requires huge investments at the time of setting up the infrastructure at the operator end but also at subsequent stages of operations as huge subsidies are pumped in to acquire customers. DTH projects also have a long gestation period and in the Indian context the wait to attain profitability is even longer due to the increasing burden on the operators and their inability to hike rates of packages due to cut throat competition. Needless to mention that if there is no certainty of continuation after the expiry of initial licensing term, the entire investment made may be exposed to the risk of getting jeopardised in the event of non-renewal, said Dish TV in its reply.
The DTH operators have also stated that the entry fee of Rs. 10 crore (Rs 100 million) should not be payable again for the extension of validity period of the DTH licences. They argue that the entry fee is generally applicable only to new players. The objective of having an entry fee, after all, is to establish the bonafide of service providers. It is also used as a means to keep non-serious players out. DTH operators feel that the value of bank guarantee should be kept at Rs. 40 crore (Rs 400 million).
The bank guarantee, according to TRAI, is a safeguard against non-payment of licence fee and violation of licence conditions by the licencee. However, Airtel Digital TV contended that there should not be any bank guarantee for existing DTH operators during increase in the validity period of their licence. Notwithstanding the above, bank guarantee should be reduced to 50 per cent of the existing bank guarantee of Rs. 40 crore (Rs 400 million).
Videocon d2h is of the opinion that the bank guarantee needs to be refurbished once the period of licence expires. However, it said that the quantum of bank guarantee should not be increased. The existing DTH players have proved themselves and there has not been a single occasion in the last decade when the bank guarantee had to be invoked, Videocon d2h said.
Dish TV has suggested that the need to continue with the bank guarantee should be dispensed with keeping in view that all the DTH operators have been operational for a considerable length of time. The present quantum of bank guarantee should be maintained and the same needs to be restored once the period of licences expired, said Reliance Digital TV.
Sun Direct opined that the existing DTH operators should be required to renew their bank guarantees at the time of renewing licence. The DTH operators have also urged TRAI to implement the information and broadcasting ministry’s decision and its recommendation dated 15 April 2008 to reduce the licence fee from 10 per cent to 6 per cent. Considering multiple taxation, investment and huge losses, the DTH operators have said that licence fees should be charged on Adjusted Gross Revenue (ADR) instead of Gross Revenue to bring it on par with telcos.
Additionally, Dish TV has urged TRAI to modify the License Agreement by allowing licensees to take DTH Ku-band capacity directly from foreign satellite operators on any satellite which has been coordinated with the Department of Space (DoS). The capacity lease should be permitted in the FSS or BSS bands or in any planned band which has been coordinated with ISRO, it said. Dish TV also demanded that VAS services including two-way connectivity, mail, browsing and Internet streaming should be permitted from DTH terminals using satellite uplinks and downlinks.
Airtel Digital TV submitted that DTH operators should be allotted additional bandwidth within the same orbital slot to cater to the technical requirement. Lack of capacity effectively denies DTH operators the opportunity to provide more channels to customers and be an effective alternative to cable who are not dependent on transponders to carry channels, it said.
Read more at: DTH ops urge TRAI to increase licence validity period | TelevisionPost.com | TelevisionPost.com
