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Government may grant concession to DTH companies

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Government may grant concession to DTH companies

Although DTH has been a non-starter so far, the government may explore granting concessions to participating companies if they satisfy the government on several fronts.

Earlier, the government had indicated that it would consider granting concessions to the DTH players only if the service is meant for the masses and not the elite, but now it is more specific about its conditions.

First of all, the potential players must give an assurance to the government that the viewership-base for DTH would be much more than what is being projected now. As against the estimated figure of 3 million DTH homes in India, the government is looking for a much higher figure of at least 15 million DTH homes, to even consider relaxing some of the DTH guidelines. Even if the number of DTH homes increases to 15 million, it will be less than 50 per cent of the 38 million existing cable TV homes in the country.

According to sources, the price of the receiver and the DTH dish must be reduced drastically. As per estimates, the DTH dish and receiver are priced at around Rs 8,000, excluding the installation charges. Broadcasters have to assure the government with data that the price of these receivers and dishes would be down considerably.

The government is also asking for a significant cut in the monthly fee. Currently, the monthly fee that a DTH user is supposed to pay to the service provider is pegged at around Rs 1000. That fee must be brought down to realistic levels, in the range of Rs 350 to Rs 450 a month. This level of pricing would be closer to the current cable TV rates thereby making it possible for larger numbers to switch over to DTH.

Significantly, broadcasters who are keen on investing in the DTH platform have opposed the conditional access system, probably fearing that CAS would cut into the DTH market. Now with the CAS issue put on hold, at least till the next session, DTH hopefuls may be eyeing a bigger pie in the market.

In more than a year after DTH has been allowed, there is only one application, from Space Television, that too with a rider. Space Television, which is said to have the backing of Star, has asked for concession in the area of revenue-sharing with the government and reduction of custom duty on set-top boxes.

As per the DTH norms, the applicant company is required to pay an entry fee of Rs 10 crore in the beginning. In addition, 10 per cent per year of the revenue collected by the platform owner is payable to the government as annual fee. The licencee is also required to execute a bank guarantee of Rs 40 crore valid for the duration of the licence. Also, the total foreign investment in the DTH platform cannot exceed 49 per cent, in which the share of FDI would be limited to 20 per cent.

As for the Space Television application, the government official said that with all the riders, the application does not appear to be serious. The government needs commitment from the participating entities to keep the dialogue going on the DTH issue.

Source: Financial Express


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