Why is MIB stalling TRAI’s push to ease DTH industry’s burden?

Nearly two years after the Telecom Regulatory Authority of India (TRAI) recommended slashing the licensing fee for Direct-to-Home (DTH) operators from 8% to 3% of their Adjusted Gross Revenue (AGR), the Ministry of Information and Broadcasting (MIB) remains silent, leaving the beleaguered sector in a regulatory limbo.

With no official response or implementation in sight, India’s four private DTH players, Dish TV, Tata Play, Bharti Telemedia and Sun Direct, continue to face mounting financial pressure. As the subscriber base shrinks by nearly 8 million in three years, thanks to the dual threat of OTT platforms and Prasar Bharati’s DD Free Dish, the delayed policy reform adds fuel to the fire.

Industry voices say the unresolved issue is not just bleeding DTH players dry but also triggering larger questions around policy responsiveness, regulatory friction, and whether MIB is weighing broader ecosystem implications over TRAI’s sector-specific recommendations.

As DTH players bleed subscribers and revenue, the question looms: What’s stopping the government from implementing long-overdue reforms?

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. The rationale was clear: enable DTH platforms to compete more effectively in a rapidly evolving media landscape dominated by free-to-air and OTT services. TRAI clarified that AGR should exclude revenue from non-core sources and GST, ensuring transparency in fee computation.

However, despite repeated follow-ups from DTH operators, the Ministry has neither accepted nor rejected the proposal. "We have been approaching the ministry for implementation but have received no clarity," said a source close to the developments, requesting anonymity.

A shrinking market

The urgency of the matter is reflected in the numbers. According to TRAI’s Indian Telecom Services Yearly Performance Indicators 2023-24, the combined active subscriber base of the four major DTH players fell from 69.57 million in March 2021 to 61.97 million by March 2024 which went further down to 59.9 million by September 2024.

Now, as per the latest TRAI data, the total active subscriber base has decreased from 59.91 million in September 2024 to 58.22 million in December 2024.

Out of the four DTH players, Tata Play has the highest share of subscribers at 31.49 %, followed by Bharati Telemedia Ltd at 29.89%, Sun Direct TV Pvt Ltd at 19.5% and Dish TV at 19.13%.

While OTT platforms continue to expand their user base, Prasar Bharati’s DD Free Dish is gaining traction with rural and price-sensitive viewers, further eroding the paid DTH market.

"We are bleeding subscribers. Operating under an 8% license fee regime when a 3% recommendation is pending feels like a penalty," said another senior industry official.

A senior official from TRAI told exchange4media, “We have done what we had to. This is not in our control anymore. It is upto the ministry now. Cannot comment further.”

The MIB silence & possible reasons

Industry observers are beginning to question why the MIB has not acted. While no formal communication has been issued, experts believe MIB may be taking a broader view of the media distribution ecosystem.

A senior industry expert pointed out the disparity in operational costs: while DTH players pay around ₹20 crore annually in transponder fees, a single MSO can spend upwards of ₹80 crore per year on leased lines, plus over ₹12 crore monthly on right-of-way (RoW) charges.

DTH transponder fees are the costs that DTH service providers pay to the Indian Space Research Organisation (ISRO) or other satellite providers for the use of satellite capacity to transmit channels to viewers. These fees cover the cost of leasing or using transponders on satellites.

"If DTH operators get such massive relief, cable companies might rethink their business models entirely. It could skew the competitive landscape," the expert said, adding that existing litigation and structural complexities may also be influencing MIB's caution.

Some insiders hint at a deeper undercurrent—a possible friction between TRAI and MIB. While TRAI is the telecom and broadcast sector regulator, MIB holds the final authority over policy implementation. The lack of response to TRAI's recommendation could indicate a turf issue or a prioritization dilemma within the ministry.

"There is no real clarity on who's driving this policy now. If TRAI has done the groundwork and consulted stakeholders, what is stopping the Ministry?" asked experts.

Mounting dues

Recently, MIB has raised license fee demands totalling over ₹16,000 crore from private DTH players. The move has only intensified the industry's plea for relief. With such massive retrospective dues and falling revenues, some players fear the sector could reach a breaking point if reforms continue to stall.

Unless the ministry issues a clear directive soon, DTH players may either pass the burden to consumers or be forced into consolidation or operational cutbacks. Experts warn that delays are not just affecting the balance sheets of companies, but also the health of a sector that still serves millions of Indian households.

In August 2023, TRAI released its ‘Recommendations on License Fee and Policy Matters of DTH Services’, in which it held that the DTH Licensee should pay an annual license fee equivalent to 3% of Adjusted Gross Revenue (AGR).

As per TRAI, AGR represents the revenue produced by the licensee’s main business operations by eliminating specific income sources and the GST amount actually paid to the government, thereby arriving at a transparent computation of AGR for DTH licensees.

At present, there are four pay DTH operators providing television services through addressable systems in the country- Tata Play Ltd, Bharti Telemedia Ltd, Dish TV India Ltd and Sun Direct TV Pvt Ltd.

The ‘DTH 2020 Amendment’ prescribed an annual License Fee at the rate of 8% of its Adjusted Gross Revenue (AGR), to be paid on a quarterly basis to MIB. The AGR is calculated by excluding Goods and Service Tax (GST) actually paid to the Government from the Gross Revenue (GR) of the Licensee.

As per TRAI, the Gross Revenue includes subscription fee, installation, activation, restoration, reactivation, relocation, visiting and other service charges, subscription and advertising revenue from platform services channels, carriage fees, revenue from marketing and placement agreements, commissions received, revenue from sale, repair and maintenance of customer premises equipment, royalties, revenue from customer support service and any other revenue of the enterprise.