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Govt may lift entry fee for DTH firms

Bipin Chandran

The government is considering a proposal to remove the entry fee and bank guarantee totalling Rs 500 million as well as scaling down the 10 per cent revenue share agreement in its Ku band direct-to-home television policy.

As per the present guidelines, companies applying for a DTH licence are required to pay an entry fee of Rs 100 million and a bank guarantee of Rs 400 million for a 10-year licence period.

"We are looking at making the policy easier for companies to enter by removing the entry fee and bank guarantee," a senior government official said.

This move comes at a time when the much-publicised DTH policy announced in November 2000 failed to attract broadcasting companies. Since the announcement of the policy only one company called Space Television has applied for a licence.

"We are also looking at reducing the 10 per cent annual revenue share. We are yet to take a final decision on this," said the government official.

The broadcasting industry wants the government to waive the 10 per cent annual revenue sharing clause for 5-10 years till a cost-intensive DTH venture becomes financially viable. A typical DTH platform with about 100-odd channels would require investment of around $500 million.

The 10th Five-Year Plan working group of the Planning Commission had also asked the government to review the DTH policy.

It has said, "The present policy on DTH has not encouraged any player to come thus far and promote the growth of digital set-top boxes. This needs to be reviewed at the earliest."

The present policy does not permit foreign investment, including FDI/NRI/OCB/FII, in a DTH company exceeding 49 per cent wherein the share of foreign direct investment has been limited to 20 per cent.

The DTH licencee shall also ensure subscribers' interest through single conditional access technology, single subscriber management system and an open architecture (non-proprietary) set-top box.

Though a licencee can use the bandwidth capacity for DTH service on both Indian as well as foreign satellites, proposals envisaging use of Indian satellites would be meted preferential treatment. As per the policy the DTH licensee would be bound to carry DD channel on the most favourable financial terms offered to any other channel.

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