However, DTH players are not likely to pass on the benefits of the reduction in licence fee to their subscribers immediately.
NEW DELHI: The annual licence fee for direct-to-home (DTH) broadcasting players is set to dip from the current 10% to 6% of their gross revenues, as Telecom Regulatory Authority of India (Trai) has backed the information and broadcasting (I&B) ministry’s proposal on that.
However, DTH players are not likely to pass on the benefits of the reduction in licence fee to their subscribers immediately.
While supporting the I&B move to cut the licence fee, Trai chairman Nripendra Misra has reminded the ministry that “the decision of the government should follow Trai’s recommendations.”
In this case, the I&B ministry sent its proposaldecision to Trai on cutting the licence fee, and sought the regulator’s view.
In a letter to I&B secretary, Asha Swarup, Misra wrote, “The authority has considered the decisions/ observations of the government…. As you are aware, Section 11(1) requires the authority to make recommendations on specified matters. The decision
of the government should follow Trai’s recommendation.”
According to the regulator, imposing a lower licence fee on the service providers is likely to encourage higher growth.
It has added that with increased growth, it would be a win-win situation for the industry and the government.
Later speaking at a press conference to announce the launch of a DTH association -DOAI (DTH Operators Association of India) - Tata Sky CEO Vikram Kaushik said that since DTH is in its infancy and players are running losses, an immediate cut in tariff is unlikely.Kaushik, along with other DTH heads such as Jawahar Goel of Dish TV and Prakash Bajpai of Big TV (Anil Ambani’s Reliance group) pointed out that efforts would be made to make the platform affordable for all.
It is likely that special prices would be announced soon by various DTH platforms for bundles, bouquets and a la carte packages.
Representatives of DTH players - Tata Sky, Dish TV, Bharti, Big TV and Sun TV - came together on Wednesday to form their association, in order to lobby with the regulator and the government for common causes.
The association, 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 its DTH service (DD Direct Plus), but it is a free-to-air platform.
In all, there are between 5 million and 6 million DTH users in the country.
Dish TV, which recently touched the 3-million subscription figure, reported a net loss of Rs 251 crore in the financial year ending March 2007.
Its rival Tata Sky showed a net loss of Rs 815 crore in the corresponding period, though the service was launched in August 2006.
Two more players-Big TV and Bharti-are likely to launch their DTH service soon. And, the Videocon group has also got the DTH licence.
Of the 120-million TV households in India, only 70 million have cable connection. DTH is still in its infancy in India, and there’s sufficient room for growth.
By the year 2015, 40% of the pay TV universe (cable TV and DTH) are likely to be DTH users, significantly up from around 5% now, according to industry projections.
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