Tata Sky has approached the Ministry of Information & Broadcasting to take a long-term direct-to-home (DTH) licence as its existing permit expires in March 2021.

The DTH licence of Tata Sky was originally valid up to June 11, 2016 which was then extended up to March 31, 2021 or till the date of notification of the new DTH guidelines, whichever is earlier.

Incorporated in 2006, Tata Sky is a joint venture between the Tata Group and The Walt Disney Company. Tata Sky posted a net loss of ₹234.10 crore for the year ended March 31, 2020, as per the 2019-20 annual report of Tata Sons. The company had a profit of ₹363 crore in FY2019.

“The new DTH guidelines are not yet notified by the Ministry of Information and Broadcasting (MIB). As a result, the timing of notification of new DTH guidelines and the further extension period of DTH licence of the joint venture company is presently not ascertainable,” Tata Sons’ auditors said in the annual report.

However, in the event that neither the DTH licence is extended beyond March 31, 2021, nor the new DTH guidelines notified by the MIB, the management of the joint venture company is committed to run business as usual and continue to adhere to the conditions mentioned in the original licence, it said.

“Also, they are committed to comply with the new guidelines as and when they are released, to ensure continuity of operations. The joint venture company is in discussion with MIB for issuance of a long-term DTH licence and is awaiting response on the same,” it further stated.

Pandemic impact

On the impact of the ongoing pandemic, the annual report said that Tata Sky has continued to operate and provide DTH services to its customers, which has been declared as an essential service.

Tata Sky operates on a prepaid model for its subscription and activation services and has strong cash flow positions to meet its financial obligations (including employee payables) in a timely manner and without availing any moratorium as announced by the Reserve Bank of India, it said.

“The management of the joint venture strongly believes that there is no material impact on business operations and financial positions of the joint venture due to the Covid-19 pandemic. Further, due to improved situations and relaxations being given in certain parts of the country, the joint venture will be able to meet its future demands without any major disruptions. However, the joint venture will continue to monitor any material changes in future economic conditions as and when they arise,” it said.

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