TRAI has good news for DTH service providers – Times of India

The Telecom Regulatory Authority of India (TRAI) has proposed some new suggestions which will help DTH service providers in the country. The agency has issued recommendations on the “Licence fee and policy matters of DTH services”. As per the new proposal, licensed DTH providers will have to pay an annual licence fee of 3% of adjusted gross revenue (AGR). TRAI also mentioned that the licence fee will be brought down to zero within three years.
Why do DTH service providers have to pay a licence fee
DTH operations in India are governed by the policy guidelines that ask providers to obtain a licence for providing DTH broadcasting services in India. These guidelines also prescribe a licence fee (LF).
The LF is a non-tax fee levied on a service provider for the privilege of being permitted to carry out a licensed activity. As per the provisions of the guidelines, DTH operators have to pay a quarterly LF (which is 8% of AGR) to the Ministry of Broadcasting (MIB).
How this will help DTH service providers
The licensed providers have to submit a BG (performance bank guarantee) once the licence fee becomes zero. The BG has to be for a fixed amount equivalent to the initial BG (for example Rs 5 crore) from any scheduled bank.

Also, the BG needs to be valid for a minimum of one year and renewed every year. TRAI said that this will ensure that the BG remains valid for the entire currency of the licence agreement.

The regulator has also recommended that the licensor should also be allowed to encash the BG. In the event of a violation of any of the licence conditions, DTH service providers will be able to encash the BG in full or part.
Read what TRAI has to say
In a statement released by TRAI, the agency said: “DTH licensees should not be charged any licence fee after the end of the financial year 2026-27. The licensee should submit an initial bank guarantee from any scheduled bank to the Ministry of Broadcasting (MIB) for Rs 5 crore for the first two quarters. Thereafter, the licensee should submit a bank guarantee (BG) from any scheduled bank to the MIB for an amount equivalent to the Initial BG (i.e., Rs 5 crore) or 20 per cent of the estimated sum payable, equivalent to the License Fee for two quarters and other dues not otherwise securitised, whichever is higher.”
“Electronic bank guarantee should be encouraged and permitted for ease of doing business. These recommendations including the definition of gross revenue (GR), applicable gross revenue (ApGR), Adjusted Gross Revenue (AGR) and the percentage of AGR to calculate the licence fee for the DTH licence may be made applicable ‘prospectively’.”