Proposal to cut down DTH licence period rejected

Proposal to cut down DTH licence period rejected

The Telecom Regulatory Authority of India (TRAI) has rejected the Information and Broadcasting (I&B) Ministry's proposal to reduce DTH licence period from the current 20 years to 10 years, saying such a move may "adversely affect" potential investment in the broadcasting sector.

"The investors look for certainty in government policies with regard to continuity in business operations of an enterprise, subject to stipulated regulatory compliances," the telecom regulator has told the ministry, giving its opinion on the proposal.

While a longer licence period would provide certainty in the market, keeping a short licence period "may" adversely affect potential investment in the sector and would also "negate" the liberalisation of the FDI regime and other efforts of the government made to boost the sector, it said.

The ministry had sought the regulator's comment on its proposal to reverse some of its recommendations made in 2014. The TRAI had recommended granting of initial DTH (direct-to-home) licences to broadcasters for a period of 20 years.

"The ministry would appreciate that DTH is a highly capital intensive sector. The investments are required not only in the initial stages at the time of setting up the infrastructure, but also at subsequent stages of operations for maintaining it. The DTH operator also needs to build long-term relationships with customers," the regulator underlined in its response to the ministry's proposal to bring down the initial licence period to 10 years.

Entry fee

TRAI also disagreed with the ministry's proposal to increase the one-time entry fee in DTH licensing regime from the current Rs 10 crore to Rs 25 crore for the licence period of 10 years.

The ministry proposed increasing the entry fee, keeping in view inflation over the past 17 years.

"The basic purpose of levying an entry fee is to deter non-serious players. In fact, the quantum of the fee should be such that it ensures a level playing field between the providers of similar or substitutable services and also discourages non-serious players," the regulator noted.

It recommended that the entry fee be retained at the current Rs 10 crore in order to encourage more entrants to the DTH industry.