The Telecom Regulatory Authority of India (TRAI) has released a consultation paper on issues related to licence fee and policy matters related to Direct-to-Home (DTH) industry.

The paper will focus on issues dealing with  exclusion of non-licenced activities from the definition of gross revenues with respect to the DTH licence fee. It will also look at issues related to percentage and amount of bank guarantees payable, as well as the issue of level playing field for all distribution platform operators in terms of uniform licence fee. 

Currently, the DTH operators pay a licence fee of 8 per cent of Adjusted Gross Revenue (AGR) on a quarterly basis to the Information & Broadcasting Ministry. AGR is calculated excluding Goods and Services Tax from gross revenue. Licence fee is a non-tax fee levied on a service provider against the privilege of being permitted to carry out a licensed activity.

However,the Department of Telecommunications on October 25, 2022 carried out amendments in the Unified Licence (UL) Agreement for AGR. As per the amendment, Applicable Gross Revenue (APGR) shall be equal to gross revenues of the licensee by reducing certain revenue components as mentioned in the amendment. The definition of AGR is also amended and shall be arrived by excluding some components from APGR.

“In view of these amendments carried out by DoT, and on the request of DTH association and DTH operators, MIB has sent a reference requesting TRAI to examine the following issues from policy angle and furnish its recommendations,” the statement added. 

In addition, DTH guidelines prescribe a bank guarantee (BG) for an amount of ₹5 crore for the first two quarters, and, thereafter for an amount equivalent to licence fee for two quarters and other dues not otherwise securitszed.  DoT has also carried out certain amendments for rationalisation of bank guarantees. 

The consultation paper will also look at issues related to Uniform License Fee. ”The Distribution Platform Operators (DPOs) are governed by different sets of policy guidelines or acts and rules, hence different fee structures are applicable to these entities as prescribed in their corresponding guidelines,” TRAI noted.