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Mudasir 4K
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here is full detailed news
MUMBAI: The Telecom Regulatory
Authority of India (TRAI) has put
restrictions on vertically and
horizontally integrated entities. The
authority has also recommended
reduction of Licence Fee from 10 per
cent of gross revenue to 8 per cent
adjusted gross revenue.
In its new “DTH Licensing Regime”,
the authority has recommended that
an entity that controls a vertically
integrated DPO (distribution
platform operator) or the vertically
integrated DPO itself shall not be
allowed to “control” any other DPO
of other category.
If a vertically integrated DPO, while
growing organically or inorganically,
acquires a market share of more
than 33 per cent in a relevant
market, then the vertically
integrated entities will have to
restructure in such a manner that
the DPO and the broadcaster no
longer remain vertically integrated.
A vertically integrated broadcaster
can have only charge-per-subscriber
(CPS) agreements with various DPOs
which should be non-discriminatory.
A vertically integrated broadcaster
shall file its RIO for its approval by
the Authority. The RIO should cover
all scenarios for interconnection and
interconnection agreements should
be only on the terms specified in
the RIO.
A vertically integrated DPO will have
to declare the channel carrying
capacity of its distribution network.
And, at any given point in time, it
shall not reserve more than 15% of
this capacity for its vertically
integrated broadcaster(s). The rest of
the capacity is to be offered to the
other broadcasters on a non-
discriminatory basis.
A vertically integrated DPO shall
publish the access fees for the
carriage of channels over its network.
The access fee so specified shall be
non- discriminatory for all the
broadcasters. DPO shall file the
specified access charge, with
justification, with the Authority.
Restrictions on horizontal
integration
Any entity controlling a DPO or the
DPO itself should not “control‟ any
DPO of other category. However,
MSOs and HITS operators can have
cross-holding/‟control‟ amongst
them, subject to market share
restrictions, as specified from time to
time.
Restructuring of cross-holding/
control
There should be uniformity in the
policy on cross-holding/‟control‟
between broadcasters and
Distribution Platform operators
(DPOs), and amongst DPOs, in the
broadcasting and distribution
sectors.
Definition of control
An entity (E1) is said to “Control”
another entity (E2) and the business
decisions thereby taken, if E1,
directly or indirectly through
associate companies, subsidiaries
and/or relatives:
(a) Owns at least twenty per cent of
total share capital of E2. In case of
indirect shareholding by E1 in E2,
the extent of ownership would be
calculated using the multiplicative
rule. For example, an entity who
owns, say, 30% equity in Company A,
which in turn owns 20% equity in
Company B, then the entity’s
indirect holding in Company B is
calculated as 30% * 20%, which is
6%.; Or
(b) exercises de jure control by
means of:
(i) having not less than fifty per cent
of voting rights in E2; Or (ii)
appointing more than fifty per cent
of the members of the board of
directors in E2; Or (iii) controlling
the management or affairs through
decision-making in strategic affairs
of E2 and appointment of key
managerial personnel; Or
(c) exercises de facto control by
means of being a party to
agreements, contracts and/or
understandings, overtly or covertly
drafted, whether legally binding or
not, that enable the entity to control
the business decisions taken in E2,
in ways as mentioned in (b) (i) (ii)
and (iii) above.
For this purpose:
(i) The definitions of “associate
company”, “subsidiary” and “relative”
are as given in the Companies Act
2013.
(ii) An “entity” means individuals,
group of individuals, companies,
firms, trusts, societies and
undertakings.
(2) DTH operator.
Licence Period
Under the new licensing regime for
DTH, licenses should be issued for a
period of 20 years. Upon request of
the Licensee, the period of licence
may be renewed by 10 years at a
time, on the terms and conditions
specified by the Licensor in
consultation with the Authority.
Entry Fee
A one-time entry fee of Rs. 10 crore
should be charged in the new DTH
licensing regime. The renewal shall
be on the terms and conditions,
including renewal fee, specified by
the Licensor, in consultation with
the Authority.
Licence Fee
The licence fee in the new DTH
licensing regime should be charged
as 8% of Adjusted Gross Revenue
(AGR) where AGR is calculated by
excluding, Service Tax,
Entertainment Tax and Sales Tax /
VAT actually paid to the Government,
from the Gross Revenue (GR).
The DTH licensees shall be required
to pay licence fee on a quarterly
basis, the quantum thereof shall be
equal to the actual licence fee
payable for the preceding quarter.
The annual settlement of the licence
fee shall be done at the end of the
financial year.
The annual Licence Fee shall be
subject to a minimum of 10% of the
Entry Fee.
The licence should include a
provision that prescribes that the
Licensor reserves the right to modify
the licence Fee as a percentage of
AGR any time during the currency of
the agreement.
The schedule of payment of Licence
Fee should be amended accordingly.
Migration Scheme and Migration
Fee
Once the Government notifies the
new DTH licensing regime, a DTH
operator shall be allowed to migrate
to the new regime at any time
during the currency of its existing
licence. Before obtaining a licence
under the new regime, the DTH
operator shall clear all the dues and
fulfill all obligations under the
existing licence terms and conditions
as well as those arising out of legal
cases pending before various courts
of law.
For the DTH operator whose licence
period under the existing DTH
licensing regime has already expired
on 30th September 2013, the
effective date of new DTH licence
shall be 1st October 2013.
A “migration fee‟ should be charged
from existing DTH operators who
wish to migrate to the new DTH
licensing regime. The quantum of
„migration fee‟ should be arrived at
as per the following formula:
Migration fee = [Entry fee in the new
DTH licensing regime - (Entry fee
under existing licence/existing
licence period i.e. 10 years) x (No.
Of years remaining in the existing
regime at the time of migration)]
In this formulation part of a year is
not to be counted.
Interoperability of DTH STBs
The licence condition prescribed at
clause 7.1 of the existing DTH
Guidelines should be replaced with
the following clause:
“The Set Top Box offered by a DTH
service provider shall have such
specifications as laid down by the
BIS from time to time.”
BIS should come out with updated
specifications for STBs from time to
time and while doing so, BIS shall
consult TRAI.
The licence conditions should
mandate the licensee to comply with
the tariff order/scheme prescribed
by TRAI for commercial
interoperability.
MUMBAI: The Telecom Regulatory
Authority of India (TRAI) has put
restrictions on vertically and
horizontally integrated entities. The
authority has also recommended
reduction of Licence Fee from 10 per
cent of gross revenue to 8 per cent
adjusted gross revenue.
In its new “DTH Licensing Regime”,
the authority has recommended that
an entity that controls a vertically
integrated DPO (distribution
platform operator) or the vertically
integrated DPO itself shall not be
allowed to “control” any other DPO
of other category.
If a vertically integrated DPO, while
growing organically or inorganically,
acquires a market share of more
than 33 per cent in a relevant
market, then the vertically
integrated entities will have to
restructure in such a manner that
the DPO and the broadcaster no
longer remain vertically integrated.
A vertically integrated broadcaster
can have only charge-per-subscriber
(CPS) agreements with various DPOs
which should be non-discriminatory.
A vertically integrated broadcaster
shall file its RIO for its approval by
the Authority. The RIO should cover
all scenarios for interconnection and
interconnection agreements should
be only on the terms specified in
the RIO.
A vertically integrated DPO will have
to declare the channel carrying
capacity of its distribution network.
And, at any given point in time, it
shall not reserve more than 15% of
this capacity for its vertically
integrated broadcaster(s). The rest of
the capacity is to be offered to the
other broadcasters on a non-
discriminatory basis.
A vertically integrated DPO shall
publish the access fees for the
carriage of channels over its network.
The access fee so specified shall be
non- discriminatory for all the
broadcasters. DPO shall file the
specified access charge, with
justification, with the Authority.
Restrictions on horizontal
integration
Any entity controlling a DPO or the
DPO itself should not “control‟ any
DPO of other category. However,
MSOs and HITS operators can have
cross-holding/‟control‟ amongst
them, subject to market share
restrictions, as specified from time to
time.
Restructuring of cross-holding/
control
There should be uniformity in the
policy on cross-holding/‟control‟
between broadcasters and
Distribution Platform operators
(DPOs), and amongst DPOs, in the
broadcasting and distribution
sectors.
Definition of control
An entity (E1) is said to “Control”
another entity (E2) and the business
decisions thereby taken, if E1,
directly or indirectly through
associate companies, subsidiaries
and/or relatives:
(a) Owns at least twenty per cent of
total share capital of E2. In case of
indirect shareholding by E1 in E2,
the extent of ownership would be
calculated using the multiplicative
rule. For example, an entity who
owns, say, 30% equity in Company A,
which in turn owns 20% equity in
Company B, then the entity’s
indirect holding in Company B is
calculated as 30% * 20%, which is
6%.; Or
(b) exercises de jure control by
means of:
(i) having not less than fifty per cent
of voting rights in E2; Or (ii)
appointing more than fifty per cent
of the members of the board of
directors in E2; Or (iii) controlling
the management or affairs through
decision-making in strategic affairs
of E2 and appointment of key
managerial personnel; Or
(c) exercises de facto control by
means of being a party to
agreements, contracts and/or
understandings, overtly or covertly
drafted, whether legally binding or
not, that enable the entity to control
the business decisions taken in E2,
in ways as mentioned in (b) (i) (ii)
and (iii) above.
For this purpose:
(i) The definitions of “associate
company”, “subsidiary” and “relative”
are as given in the Companies Act
2013.
(ii) An “entity” means individuals,
group of individuals, companies,
firms, trusts, societies and
undertakings.
(2) DTH operator.
Licence Period
Under the new licensing regime for
DTH, licenses should be issued for a
period of 20 years. Upon request of
the Licensee, the period of licence
may be renewed by 10 years at a
time, on the terms and conditions
specified by the Licensor in
consultation with the Authority.
Entry Fee
A one-time entry fee of Rs. 10 crore
should be charged in the new DTH
licensing regime. The renewal shall
be on the terms and conditions,
including renewal fee, specified by
the Licensor, in consultation with
the Authority.
Licence Fee
The licence fee in the new DTH
licensing regime should be charged
as 8% of Adjusted Gross Revenue
(AGR) where AGR is calculated by
excluding, Service Tax,
Entertainment Tax and Sales Tax /
VAT actually paid to the Government,
from the Gross Revenue (GR).
The DTH licensees shall be required
to pay licence fee on a quarterly
basis, the quantum thereof shall be
equal to the actual licence fee
payable for the preceding quarter.
The annual settlement of the licence
fee shall be done at the end of the
financial year.
The annual Licence Fee shall be
subject to a minimum of 10% of the
Entry Fee.
The licence should include a
provision that prescribes that the
Licensor reserves the right to modify
the licence Fee as a percentage of
AGR any time during the currency of
the agreement.
The schedule of payment of Licence
Fee should be amended accordingly.
Migration Scheme and Migration
Fee
Once the Government notifies the
new DTH licensing regime, a DTH
operator shall be allowed to migrate
to the new regime at any time
during the currency of its existing
licence. Before obtaining a licence
under the new regime, the DTH
operator shall clear all the dues and
fulfill all obligations under the
existing licence terms and conditions
as well as those arising out of legal
cases pending before various courts
of law.
For the DTH operator whose licence
period under the existing DTH
licensing regime has already expired
on 30th September 2013, the
effective date of new DTH licence
shall be 1st October 2013.
A “migration fee‟ should be charged
from existing DTH operators who
wish to migrate to the new DTH
licensing regime. The quantum of
„migration fee‟ should be arrived at
as per the following formula:
Migration fee = [Entry fee in the new
DTH licensing regime - (Entry fee
under existing licence/existing
licence period i.e. 10 years) x (No.
Of years remaining in the existing
regime at the time of migration)]
In this formulation part of a year is
not to be counted.
Interoperability of DTH STBs
The licence condition prescribed at
clause 7.1 of the existing DTH
Guidelines should be replaced with
the following clause:
“The Set Top Box offered by a DTH
service provider shall have such
specifications as laid down by the
BIS from time to time.”
BIS should come out with updated
specifications for STBs from time to
time and while doing so, BIS shall
consult TRAI.
The licence conditions should
mandate the licensee to comply with
the tariff order/scheme prescribed
by TRAI for commercial
interoperability.
harshbardhan
Contributor
- Joined
- 27 Aug 2012
- Messages
- 1,189
- Reaction score
- 279
Good days for DTH operators. What about DTH subscribers? Will the benefits of relaxation be passed on to them?
Mudasir 4K
Contributor
- Joined
- 25 Dec 2012
- Messages
- 2,357
- Reaction score
- 1,750
i don't think dth operators will reduce any fees from base packs till the entertainment tax is reduced by the govt.
