The Telecom Regulatory Authority of India (TRAI) has released a consultation paper on extension of DTH licence. The matter comes under TRAI’s umbrella as the Ministry of Information and Broadcasting had sent a reference letter to TRAI on September 30, asking about the terms and conditions for extension of DTH licence on expiry of the 10-year period.
The key issues discussed in the consultation paper pertain to entry fee, bank guarantee and licence fee.
The matter has come to the fore as the licence period of Dish TV ended on September 30, 2013 and there were no recommendations of renewing licence or paying licence fee.
According to TRAI, the validity period of license shall be 10 years on a non-exclusive basis, and shall be reckoned from the date of issue of Wireless Operational License by the Wireless Planning and Coordination (WPC) Wing of the Ministry of Communications, unless terminated earlier for default or for insolvency or for convenience or for transfer of the License. TRAI further said, “The license shall not be transferred without prior approval of the licensor.”
Elaborating on the licence fee, the regulator informed that the licensee shall pay an initial non-refundable entry fee of Rs 10 crore before the issue of Letter of Intent by the licensor, and after the issue of the Wireless Operational License by the WPC, an annual fee equivalent to 10 per cent of the gross revenue in that particular financial year needs to be paid.
Regarding the bank guarantee, TRAI highlighted that the Licensee shall, within one month of the issue of SACFA clearance by the WPC, have to submit to the MIB a bank guarantee from any scheduled bank in Form-C for an amount of Rs 40 crore, valid for the duration of the license.
The regulator also highlighted that the licensor shall be at liberty to encash the bank guarantee in full or in part in the event of non-payment of the license fee or violation of any of the license condition.
TRAI has sought the comments and views from various stakeholders on its consultation paper. Last date for receiving the comments is October 15, 2013.