The Telecom Regulatory Authority of India (Trai) has presented a series of recommendations aimed at reshaping the licence fees and policy framework for Direct-to-Home (DTH) services in India. These recommendations, in line with recent amendments introduced by the Department of Telecommunications (DoT), aim to streamline Adjusted Gross Revenue (AGR) calculations, redefine Bank Guarantee (BG) prerequisites, and gradually reduce licence fees for DTH operators.
DTH operations in India are governed by established policy guidelines that dictate the acquisition of licenses for offering DTH broadcasting services. These guidelines impose a licence fee (LF), constituting a non-tax fee imposed on service providers as a consideration for the privilege to engage in licensed activities. According to the guidelines, DTH operators are obligated to remit an LF amounting to 8% of their Adjusted Gross Revenue (AGR) on a quarterly basis to the Ministry of Information and Broadcasting (I&B).
A Bank Guarantee (BG) serves as a financial instrument to ensure prompt payment of dues by service providers and adherence to licence agreement stipulations. Under the existing DTH guidelines, an initial BG of ₹5 crore is required for the first two quarters, followed by an equivalent amount to the LF for the subsequent two quarters and other outstanding dues not covered by security.
The recommendations propose that Gross Revenue (GR) be inclusive of all income and revenue stemming from operations, encompassing interest, dividends, rent, and gains from asset sales. Furthermore, the concept of Applicable Gross Revenue (ApGR) is introduced, which aids in calculating licence fee revenue by deducting specific components such as revenue from DoT-issued licenses or permissions, government reimbursements, and other forms of income.
Trai suggests that DTH licensees should pay an annual licence fee amounting to 3% of their AGR. Over a three-year period, the licence fee should be gradually reduced to zero. By the conclusion of the financial year 2026-2027, DTH licensees would no longer be subject to any licence fees.
Trai also recommends streamlining the reporting process by revising Form-D, the Statement of Revenue and Licence Fee for DTH licensees. The submission process for Form-D should be transitioned to an end-to-end online format, with the ability to upload relevant documents digitally through a single window system. Verification mechanisms should be enhanced through this digital portal.
The recommendations propose a shift toward electronic Bank Guarantees to facilitate ease of business. Licensees should submit an Initial Bank Guarantee of ₹5 crore for the initial two quarters and later transition to a Performance Bank Guarantee. Once licence fees reach zero, a fixed amount BG should be maintained to ensure adherence to licence conditions.
Trai’s recommendations seek to modernize and optimize the DTH licensing framework in India, ensuring more efficient fee structures, simplified processes, and greater flexibility for operators in the evolving media landscape.
