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TRAI Releases Recommendations on DTH Services License Fee

  • 24 Aug 2023

On 21st August, 2023, the Telecom Regulatory Authority of India (TRAI) has unveiled its recommendations concerning "License Fee and Policy Matters of DTH Services."

Key Points

  • Background and Purpose: TRAI has issued recommendations following a request from the Ministry of Information and Broadcasting.
  • This request was made to address the amendments made by the Department of Telecommunications in the Unified License Agreement.
  • Changes in Definitions: The amendments made by the Department of Telecommunications involve changes in the definitions of Adjusted Gross Revenue (AGR) and Bank Guarantee (BG) quantum, aiming for structural reforms.
  • License Fee and Bank Guarantee: The operation of Direct-to-Home (DTH) services in India is guided by policy guidelines that prescribe a License Fee (LF).
  • Additionally, a Bank Guarantee (BG) is required to ensure timely payment of dues and adherence to license conditions.
  • Consultation Process: TRAI released a Consultation paper on "License Fee and Policy Matters of DTH Services" on January 13, 2023.
  • It invited comments from stakeholders, receiving seven comments and one counter-comment.
  • An Open House Discussion was also held on April 20, 2023, to discuss the issues raised in the consultation paper.
  • Salient Recommendations: TRAI's recommendations encompass various aspects of License Fee and Policy Matters for DTH services:
    • ­Gross Revenue (GR) definition and exclusions
    • ­Calculation of Applicable Gross Revenue (ApGR)
    • ­Adjusted Gross Revenue (AGR) calculation, including the exclusion of GST paid
    • ­Revision of Form-D (Statement of Revenue and Licence Fee)
    • ­Mechanism for deduction verification process
    • ­Reduction of License Fee for DTH Licensees to zero over time
    • ­Bank Guarantee requirements, including electronic options
    • ­Implementation of recommendations 'prospectively'
  • Boosting the DTH Sector: The implementation of these recommendations is expected to invigorate the DTH sector by addressing crucial aspects of License Fee, Bank Guarantee, and revenue calculations.
  • These measures aim to facilitate growth and competitiveness in the television distribution market.