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NEW DELHI, April 17 (Reuters) – India’s regulator for broadcast services has approved a government proposal to cut licence fees paid by direct-to-home (DTH) television operators, and hopes the move will lead to faster growth in the sector.
India had proposed cutting the fees to 6 percent of annual revenue from the 10 percent it currently charges, to spur growth of DTH in a market of 82 million pay-TV households.
“Broadcasting services should not be treated as a major revenue stream for the government. Imposing lower license fee on the service providers is likely to encourage higher growth,” the Telecom Regulatory Authority of India (TRAI) said in a letter to the government.
The TRAI had in 2004 recommended the fee be cut to 8 percent of adjusted gross revenue, which is revenue minus taxes, fees paid to broadcasters for channels, and sales of hardware to customers.
But the government wrote to the regulator in March it would charge the fee on total revenue, to prevent companies from under-reporting their revenue and paying less of fees. The regulator has accepted this decision, TRAI said in its letter. India has 3.2 million DTH customers now, but research firm Media Partners Asia estimates this figure will rise to 25 million by 2012.
Telecoms operators Bharti Airtel and Reliance Communications have said they will launch such services.
They would be entering a market dominated by Dish TV India , Sun TV Networks Ltd and Tata Sky, a joint venture of the Tata group and News Corp.
(Reporting by C.J. Kuncheria; Editing by Prem Udayabhanu)