MIB directs DTH players to clear dues to get fresh licence

Licence will be valid for a period of 20 years from the date of issue

e4m by Javed Farooqui
Published: Dec 31, 2020 8:33 AM  | 4 min read

The ministry of information and broadcasting (MIB) Wednesday issued amended guidelines for direct to home (DTH) operators in the wake of the union cabinet approving the amendments to the DTH guidelines.

The MIB order states that the existing licencees are required to apply afresh to get a licence for providing DTH services in India.

The ministry also said that a fresh licence will be issued to existing licencees subject to their clearing all dues and fulfilling all obligations under the terms and conditions of the existing license as well as those arising out of legal cases pending before various Courts of Law.

The MIB had recently asked Dish TV to pay up Rs. 4164.05 crore in licence fee dues including interest.

The ministry said that the amended DTH Guidelines will come into effect immediately. It further added that the consolidated operational guidelines along with the amendments will be issued in due course. These shall be applicable to all licences issued hereinafter.

As per the amended guidelines, a vertically integrated entity will not reserve more than 15% of the operational channel capacity for its vertically integrated operator. The rest of the capacity is to be offered to the other broadcasters on a non-discriminatory basis.

Vertical integration means a company owns or controls its suppliers or distributors. For example, a broadcaster owning a stake in TV distribution platforms like cable TV, DTH, or HITS.

While welcoming the new guidelines, the Indian Broadcasting Foundation (IBF) had recently urged the MIB to remove cross-media restrictions in the DTH sector. Currently, broadcasters can't hold more than 20% stake in a DTH company.

Licence will be valid for a period of 20 years from the date of issue of wireless operational license by wireless Planning and coordination wing of Ministry of Communications. Licence may be renewed for 10 years at a time. However, the license can be cancelled/suspended by the Licensor at any time in the interest of the Union of India.

According to the amended guidelines, no entry fee will be charged from the DTH operators holding licence on the date of notification of these guidelines.

Further, the licencee will have to submit a Bank Guarantee from any scheduled Bank to the MIB for an amount of Rs.5 crores for the first two quarters, and, thereafter for an amount equivalent to the estimated sum payable, equivalent to licence fee for two quarters and other dues not otherwise securitised. 

For existing DTH Operators, Bank Guarantee from any Scheduled Bank for an amount equivalent to the estimated sum payable, equivalent to licence fee for two quarters and other dues not otherwise securitized. Further, the Bank Guarantee shall be valid for a year which should be renewed on a year-on-year basis in such a manner that the Bank Guarantee remains valid during the entire license period'

The DTH licencee will have to pay an annual fee equivalent to 8% of its Adjusted Gross Revenue, calculated by excluding GST from Gross Revenue (GR) as reflected in the audited accounts of the company for that particular financial year. The minimum annual licence fee shall be subject to 10% of the Entry Fee.

The licence fee is to be paid on a quarterly basis, the quantum thereof to be equal to the actual License Fee payable for the preceding quarter. The annual settlement of the licence fee shall be done at the end of the financial year.

The licencor (MIB) will have the right to modify the licence fee as a fixed percentage of AGR during the validity of licence period.

The DTH operator would be permitted to operate Platform Services (PS) channels i.e. DTH operators, own channels exclusively available to its subscribers, to a maximum of 5% of its total channel carrying capacity.

The guidelines also state that a one-time non-refundable registration fee of Rs 10,000 per PS channel shall be charged from the DTH operator.

DTH operators willing to share the DTH platform and transport stream of TV channels, on a voluntary basis would be allowed to do so, wherever technically feasible. The common hardware for their Subscriber Management System (SMS) and conditional access system (CAS) applications can also be voluntarily shared.

The Set-Top Boxes (STBs) offered by a DTH Service Provider must have such specifications as laid down by the Bureau of Indian Standards (BlS) from time to time.

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