In a letter to the regulator, company highlights the issues faced by DTH players due to high licence fee and lack of level playing field
As the Ministry of Information and Broadcasting (MIB) inches closer to finalising the terms and conditions of the new direct-to-home (DTH) licence, industry leader Dish TV has approached the Telecom Regulatory Authority of India (Trai) highlighting the issues faced by DTH players due to high licence fee and lack of level playing field.
In his letter to the Trai chairman, Jawahar Goel, chairman and managing director of Dish TV India, has pointed out that the DTH industry is running into heavy losses due to multiple taxes. Additionally, Goel has sought support from the ministry and parity in treatment vis-à-vis the competitors to minimise losses.
The government had in 2008 said that licence fee for DTH operators shall be charged at 6% of the gross revenues. However, Trai had, on July 23, 2014, recommended that the licence fee payable by the DTH operators should be 8% of the adjusted gross revenue (AGR), which will be calculated by excluding service tax, entertainment tax and sales tax /VAT actually paid to the government.
Goel has suggested that the AGR in case of DTH service should mean total revenue as reflected in the audited accounts from the operation of DTH. It should also exclude items such as subscription fee charges passed on to the pay channel broadcasters, sale of hardware, including integrated receiver decoder required for connectivity at the consumer premise, in addition to service/ entertainment tax actually paid to the Central/ State Government from the gross revenue figure.
"The change in the position of Trai though was a shift from its earlier stand of payment of licence fee on AGR. However, it had been recognised that DTH players should be given some level playing field as compared to its competitors since the effective licence fee by this method would have almost remained the same as was in the case of 8% of AGR," Goel said in the letter.
Additionally, DTH service providers are not only paying taxes to the tune of 33%, but also paying between 30% and 35% of their revenue as the content cost. This apart, huge investment is going into subsidising the consumer premise equipment of which set top boxes form a major component. On the contrary, there is no license fee on cable TV operators.
He said that licence fee only on DTH operators is not only unjust, unfair, discriminatory and biased, but also arbitrary in not treating the DTH operator and the other players like broadcasters, cable operators, HITS on the same footing and thus frustrating the entire concept of equality as guaranteed and enshrined under the constitution.
"The broadcasters and DTH operator are one and the same. Both of them transmit the signal, though a satellite and make them available for the purpose of reception. In this aspect both stand in the same category and on the same footing. Therefore, subjecting DTH operator to licence fee while forbearing broadcaster and other distribution platform operators (DPOs) is discriminatory," said Goel, requesting Trai to issue necessary recommendations to the central government before it takes a final call on the terms and conditions.
DTH TROUBLES
- Jawahar Goel, chairman and managing director of Dish TV India, has pointed out that the DTH industry is running into heavy losses due to multiple taxes
- Trai in 2014 recommended licence fee payable by DTH operators at 8% of AGR
- He has sought support from the ministry and parity in treatment vis-à-vis the competitors to minimise losses
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 "Jawahar Goel")
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