TRAI Releases Recommendations on DTH Services License Fee

• 24 Aug 2023

On 21^st 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.