TRAI backs reduction in licence fee for direct-to-home channels

Mumbai: The Information and broadcasting ministry has received backing from the Telecom Regulatory Authority of India (TRAI) to its proposal for reducing licence fee on the direct-to-home (DTH) service providers from 10 per cent to six per cent.

TRAI had earlier recommended that adjusted gross revenue (AGR) should be the basis for realising licence fee and had advised a reduction in licence fee from 10 per cent to eight per cent.

The ministry had sought comments of TRAI on its proposal to reduce the licence fee for DTH service providers by four per cent. "The authority has reconsidered its position in the context of communication received from ministry of information and broadcasting," the regulator said in a statement.

The reduction in licence fee, however, may not make DTH any cheaper for the consumer as DTH operators are unlikely to pass on the benefits to the consumers.

The newly-formed DTH Operators Association of India (DOAI) believes that DTH tariffs can go down only if the taxation structure is rationalised.

Representatives of DTH players - Tata Sky, Dish TV, Bharti, Big TV and Sun TV - came together on Wednesday to form the association, in order to lobby with the regulator and the government for common causes.

DOAI is expected to perform the role of telecom associations, COAI and AUSPI, in the DTH sector. After the mobile revolution, it is the turn of DTH revolution, they said.

Currently, Dish TV (of the Essel group) and Tata Sky (joint venture between the Tatas and Rupert Murdoch's Star TV) are the two main DTH players in India.

Tamil Nadu-based Sun TV too launched its direct-to-home broadcasting service recently. Prasar Bharati too has been running a DTH service (DD Direct Plus), but it is a free-to-air platform.

There are nearly six million DTH users in the country where DTH is still in its infancy, with sufficient room for growth.

Dish TV, which recently touched the 3-million subscription figure, reported a net loss of Rs251 crore in the financial year ending March 2007.

Rival Tata Sky showed a net loss of Rs815 crore in the corresponding period, though the service was launched in August 2006.

while two more players - Big TV and Bharti - are likely to launch their DTH service soon, the Videocon group has also received a DTH licence.

It is likely that DTH operators would announce special prices for various DTH platforms for bundles, bouquets and a la carte packages.