The Telecom Regulatory Authority of India on Wednesday endorsed the Ministry of Information and Broadcasting proposal to reduce the license fee on Direct to Home (DTH) service providers.
Trai said it had received a communication from the ministry conveying its decision to continue with the concept of gross revenue for the purpose of license fee on DTH service providers and to reduce the license fee.
The ministry had further sought the authority's comments on its proposal to reduce the license fee from the current ten per cent to six per cent for the DTH service providers.
Trai, in its earlier recommendations, had advised that Adjusted Gross Revenue (AGR) should be the basis for realising license fee.
Accordingly, reduction in license fee from ten per cent to eight per cent was also recommended.
However, Trai reconsidered its position in the context of communication received from the I&B ministry. It noted that the DTH service providers as well as other broadcasting service providers were paying license fee as a percentage of the gross revenue.
The authority realised that I&B ministry might have to scrutinise all the details including pass through deductions, which could be time consuming and also require additional skilled staff.
Moreover, it felt that the passing of some components, necessary in case of telecom sector because of the interconnection mode, was not applicable in DTH.
The ministry's proposal for granting concession of four per cent from the present level of 10 per cent of gross revenue as license fee has also been accepted. It was felt that the gross revenue concept for license fee would make a case for higher relief, Trai said.
The authority expects that the lower license fee would ensure higher growth rate and would therefore, not affect the overall revenue collection.
It also said that the amendment to the existing license condition would lead to a healthy competition among the DTH operators as well as with other delivery platforms and will also bring considerable benefit to the consumers.
