Dish TV, Tata Sky get a month more to pay licence fee

However, other DTH players will have to wait for the TDSAT's decision in a hearing scheduled on Friday

Private direct-to-home players Tata Sky and Disk TV can breathe easy for now, as the Telecom Disputes and Settlement Appellate Tribunal (TDSAT) has deferred a case -- regarding the payment of licence fees on basis of their gross revenue -- to May 6.

The Ministry of Information and Broadcasting (MIB) (the respondent in the case) has communicated that it would not press for realisation of the impugned demand until then. The MIB has time till then to prepare and present its case in the tribunal.

However, other DTH players - Airtel Digital TV, Reliance Digital TV, Videocon d2h and Sun Direct -- will have to wait for the TDSAT's decision in a hearing scheduled on Friday.

The tribunal observed the licences granted to operators other than Dish TV and Tata Sky have a clause (3.1.1) that defines the parameters of gross revenue. Keeping this in mind, it ruled that it will hear the case of the four operators on April 4, while the case involving Tata Sky and Dish TV will be heard on May 6.

The DTH operators had approached thetribunal challenging the MIB's demand to the operators to pay Rs 2066crore in license fees by 9 April. The ministry had sent notices tothe six private DTH entities on 24 March asking them to pay the saidamount in 15 days.

As per the current mandate, DTHoperators are to pay 10 per cent of the gross revenue as license fee.The Telecom Regulatory Authority of India (TRAI) had recentlyrecommended that the fee be brought down to eight per cent.

The licence fee demanded by the MIB has been calculated on gross revenue for each DTH service provider. However, the service providers are of the opinion that the licence fee should be levied as a percentage of the adjusted gross revenue (which excludes service tax and sales tax). The ministry and DTH operators have been at the loggerheads over the issue for quite some time.

In fact, this is not the first time that the DTH service providers have approached the TDSAT in this regard. In 2009, Airtel DTH and Sun Direct had approached the tribunal, which had ruled in their favour, saying licence fee should be paid on the basis of adjusted gross revenue.

However, the MIB took the matter to the Supreme Court challenging the TDSAT's ruling. The case is still pending and is expected to come up for hearing soon.

A top management executive of a leading DTH operator said, "We have no problem with paying the fee. What we don't understand is why the MIB sent a notice, while the matter is still with the Supreme Court. The issue is clearly sub judice."

Other officials from the industry echoed similar sentiment and said the TDSAT's decision had come as a relief.