AIDCF urges MIB to reject TRAI proposal on DTH licence fee cut

The All India Digital Cable Federation (AIDCF) has written to the Ministry of Information and Broadcasting (MIB), urging it to reject the Telecom Regulatory Authority of India’s (TRAI) recent recommendation to reduce the Direct-to-Home (DTH) license fee from 8% to 3%. The industry body warned that the proposal, if accepted, would have “far-reaching and potentially irreversible consequences” on the survival of cable TV operators and the broader goals of digital inclusivity.

In the letter, AIDCF stated, “We respectfully submit that TRAI’s recommendations, if accepted, would have far-reaching and potentially irreversible consequences not only on the survival of Multi System Operators (MSOs) as viable enterprises but also on the larger goals of broadband proliferation and digital inclusivity across the country.”

The federation argued that the DTH industry already enjoys significant structural and commercial advantages, particularly the administrative allotment of spectrum free of cost, a benefit that, according to AIDCF, was originally compensated by a 10% license fee on Adjusted Gross Revenue (AGR). The cost of this spectrum, the letter noted, would have been approximately ₹45,000 crore over 20 years had it been auctioned.

“The proposed reduction overlooks the significant structural and commercial advantages already enjoyed by DTH operators, particularly the administrative allotment of spectrum… The quantum of spectrum cost if considered would have been ₹45,000 crore for 20 years,” said the letter, a copy of which is available with e4m. 

The federation further warned that lowering the DTH license fee would “deepen the existing imbalances between DTH and Cable TV operators and will make the current market dynamics completely unfair and non-level playing for Cable TV Operators.”

AIDCF also raised concerns over procedural transparency, noting that TRAI’s January 2023 consultation paper did not explicitly mention a proposal to cut the license fee, thereby denying stakeholders a fair opportunity to respond. “The recommendation process lacked transparency and did not provide an adequate platform for meaningful stakeholder input,” it said.

Highlighting the potential fallout, the federation said the move could result in “widespread shutdowns of operations among the 880 MSOs and 1.6 lakh LCOs across the country,” affecting nearly “10 lakh individuals directly associated with the sector” and disrupting affordable digital access in underserved areas.

AIDCF concluded the letter by urging the Ministry to maintain parity in regulation. “We earnestly urge you to reject the proposed reduction or waiver of the DTH license fee and maintain a level playing field between the industry players,” the federation wrote.

It also requested a meeting with MIB officials to present its concerns in detail.

DTH platforms are required to pay an 8% charge on their Adjusted Gross Revenue (AGR) as mandated by the Ministry of Information and Broadcasting (MIB). However, TRAI in August last year had issued its recommendations and reduced it to 3%. This has not been implemented yet.

In August 2023, TRAI issued its "Recommendations on License Fee and Policy Matters of DTH Services," advising that the annual license fee for DTH operators be reduced to 3% of AGR, and ultimately phased out by FY 2027.

DTH platforms in India, including major players like Tata Play and Dish TV, had voiced their concerns to TRAI about the severe financial strain they are facing due to the high licence fee imposed on them.