The government of India has announced the new guidelines for direct to home (DTH) services in the country as well as updated licensing norms for DTH operators. The big changes in the new guidelines issued by the Ministry of Information and Broadcasting include those for licensing term, infrastructure sharing and foreign direct investment (FDI). These new changes come at a time when DTH operators offering Live TV subscriptions are facing competition from video streaming platforms including Netflix, Amazon Video, Disney+ Hotstar, Voot, Zee5, Sony Liv, Jio Cinema and Lionsgate Play, to name a few. In India, the leading DTH services include Tata Sky, Dish TV, the Dish TV owned d2h, Airtel Xstream DTH and Sun Direct.
The new guidelines state that DTH licenses will now be issued for a period of 20 years, an increase from the present licensing term of 10 years. When the license comes up for renewal, it can be renewed for 10 years at a time. The license fee has also been revised downwards from 10% of Gross Revenue (GR) to 8% of Adjusted Gross Revenue (AGR) now—and the AGR will be calculated after the deduction of GST from the gross revenue (GR) of the DTH operator. It is expected that this reduction and change in calculation of license fee will allow DTH operators to invest more in quality of services and coverage, something that will directly benefit the users. By how much and how soon, we do not know at this stage.
The new guidelines for DTH companies also state that DTH operators will now be able to share infrastructure. This will be limited to sharing the common hardware for their Subscriber Management System (SMS) and Conditional Access System (CAS) applications for DTH operators who are willing to share infrastructure. This infrastructure and systems sharing, if DTH operators do get into agreements for this, will help reduce not only the network and operations costs but also allow for optimum use of satellite resources. DTH services are heavily reliant on transponders on satellites to host channels and then beam them to subscribers in India. The reduction in costs, including satellite transponder space rentals, will perhaps give DTH companies better margins to play with, and we could see a lesser cost being borne by subscribers, particularly new ones who also need to buy a new set top box (STB).
However, do note that this guideline does not refer to any sort of set top box portability, or allowing users to switch DTH services without having to change their STB. As things stand, you will need to buy a DTH provider’s exclusive STB if you wish to subscribe to a DTH service or switch services.
The foreign direct investment (FDI) in the DTH sector, which is currently capped at 49% will now instead be linked to the common hardware for their Subscriber Management System (SMS) and Conditional Access System (CAS) applications. This means, the DTH sector can avail 100% FDI, which should draw more foreign investment into India, as well as more players with bigger investment plans leading to more competition and better services as well as more competitive prices for consumers.
“The DTH is operable on pan-India basis. DTH sector is a highly employment intensive sector. It directly employs DTH operators as well as those in the call centres besides indirectly employing a sizeable number of installers at the grass-root level. 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,” says the ministry in a press note, highlighting the importance of the DTH sector in generating employment across the country.
The industry reaction has been positive to the new guidelines for DTH operators and services in India. “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 License Fee with Cable TV which too is Licensed by MIB and follows the same prices and margins as regulated by TRAI’s NTO,” says Harit Nagpal, MD & CEO, Tata Sky, in a statement shared with News18.
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