DTH operators to hike prices following import duty on set top boxes

With the levy of 5 per cent import duty on set top boxes, the Zee Group-promoted direct-to-home company DishTV will now charge an extra Rs100 on set top boxes. With effect from July 20, a single set-top box will now cost Rs1,590.

According to Dish TV's chief operating officer Salil Kapoor, the exemption on set top boxes should have been delayed till the domestic manufactures could catch up with the demand which currently stands at 10 million units.

''It was a necessary step due to increase in input cost as there has been an escalation in the cost of set top boxes due to 5 per cent increase in customs duty on the import of STBs. The business model of DTH is based on subsidy and the component cost has also gone up considerably due to the rise in dollar exchange rate in the last one year,'' Kapoor said.

''We have tried to minimise the effect on consumers by absorbing these rising input costs over the year, but the trend is on a constant rise and we have reached a level where absorbing the entire cost internally seems to be a tough proposition,'' he added.

The total revenue generated from the tax, he said, would amount to about Rs80-90 crore, though much more money would accrue from the sheer growth of the DTH industry, something that needs to be taken into account.

Other DTH service providers too are following up the duty hike with an increase in set top boxes. Tata Sky will pass on the tax to the consumers, Vikram Kaushik, MD and CEO, Tata Sky, said.

Tony D'Silva, COO, Sun Direct DTH, has also indicated that a price rise is on the cards.

The new duty on set top boxes was introduced in the union budget this year.