Four DTH operators owe Rs 7,700-8,000 cr in licence fee dues: Crisil

The Ministry of Information and Broadcasting has already issued letters to DTH operators asking them to clear pending licence fees with interest

e4m by exchange4media Staff
Updated: Jan 7, 2021 11:32 AM

Rating agency Crisil has said that the licence fee dues demanded by the Ministry of Information and Broadcasting from the top four direct to home (DTH) operators are Rs 7,700-8,000 crore while their EBITDA for the current fiscal is estimated at Rs 7,000-7,500 crore.

In a credit alert, the rating agency noted that the new licencing guidelines issued by the MIB on 30th December could significantly increase the potential liabilities of incumbents when renewing their licenses.
That’s because the guidelines say renewals will be subject to broadcasters clearing all their dues and fulfilling all obligations under the terms and conditions of their extant licence, and also those arising out of legal cases pending before various courts.

The ministry has already issued letters to DTH operators asking them to clear pending licence fees with interest. The amount payable, the ministry said, is subject to verification by its audit authorities and the outcome of pending court cases.

The MIB had recently asked Dish TV to pay up Rs. 4164.05 crore in licence fee dues including interest. Other DTH players include Tata Sky, Airtel Digital TV, and Sun Direct.

Crisil noted that the matter has been discussed at various legal fora over the past decade and continues to be sub judice. Clarity with respect to the final dues, timelines for payment and the debt-equity funding mix to pay up the liability will be crucial to ascertain the cash-flow impact for the DTH operators.
DTH operators supported by strong sponsors will be able to sustain their credit profiles notwithstanding the expected potential liability. Their credit profiles are also supported by healthy cash accrual, strong balance sheets, and high financial flexibility.

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