Under the revised terms, the licences will be awarded for 20 years — from the present 10—with an auto renewal clause for 10 years.
The existing DTH guidelines were silent on the course of action to be adopted after expiry of the 10 year license period and that led to multiple temporary extensions to DTH players after expiration of their original licenses.
The government has also revised the licence fee from 10% of gross revenues (GR), to 8% of adjusted gross revenues (AGR), which will be calculated after deduction of GST from GR.
Also, the license fee will now be collected on a quarterly basis instead of annual payment.
The revisions to the guidelines were pending since 2014, when the Telecom Regulatory Authority of India (TRAI) first issued its recommendations on issues related to new DTH licenses.
“We are grateful to Shri Javadekar for resolving the long standing impasse on the DTH License policy which will provide certainty to the sector. We look forward to a level playing field via parity of licence fee with Cable TV, which too is licensed by MIB and follows the same prices and margins as regulated by TRAI’s new tariff order (NTO),” said Harit Nagpal, MD & CEO, Tata Sky.
Among other amendments, the new guidelines cap the platform services at 5% of the respective DTH operators’ total channel carrying capacity.
For instance, if a DTH operator has a capacity of 300 channels, it can’t offer more than 15 platform services.
Also, an one-time non-refundable registration fee of Rs 10,000 per platform service channel will be charged from a DTH operator.
The guidelines have also provisioned for sharing of Infrastructure between DTH operators, on a voluntary basis.
Distributors of TV channels will be permitted to share the common hardware for their Subscriber Management System (SMS) and Conditional Access System (CAS) applications.
In terms of foreign direct investment (FDI) in the DTH sector, the guidelines state that the FDI cap in the existing DTH guidelines will be aligned with the extant department for Promotion of Industry and Internal Trade (DPIIT) policy on FDl as amended from time to time.
It is important to note that in November 2015, the government had approved 100% FDI in the DTH sector, out of which 49% was allowed via automatic route, while the remaining required FIPB (now DPIIT) approval.
The fresh guidelines are a significant shift from earlier positions, allowing ease of business.
“The new guidelines, if implemented with both letter and spirit, significantly enhance ease of doing business in the DTH sector. Sharing of common infrastructure, among other amendments, is a very forward looking move and is in line with the regulatory framework in connected sectors like telecom,” said Kaushik Moitra, partner at Bharucha & Partners.
However, experts also feel that the government should ensure that appropriate measures are taken to strengthen the common infrastructure available to the operators.
The government feels that the amended DTH guidelines, with longer license period and clarity on renewals, relaxed FDI limits, etc., will ensure “fair degree of stability” and “new investments” in the DTH sector along with employment opportunities.