Auction satellite TV rights

But Trai will have to sort out some technicalities first

The government is reviewing the process of granting permission to satellite television companies for uplinking and downlinking channels. This is a positive development as TV channels beamed using satellites should not be regulated in isolation but in sync with the overall technological and business models prevalent in the telecom and broadcasting space. Responding to a letter from the information and broadcasting (I&B) ministry on the need for a change, the Telecom Regulatory Authority of India (Trai) has floated a consultation paper on issues related to uplinking and downlinking of TV channels in India. One of the central questions being examined is whether satellite TV channels should be auctioned by the government, just like in the case of private FM radio channels. While auction of any natural resource, in this case, spectrum or airwaves used to broadcast satellite TV channels, holds merit for reasons of transparency as well as for higher revenues, there are technical issues that need to be settled before the sector can undergo any radical change.

Trai is reviewing provisions of the guidelines that came into effect six years ago in December 2011, to ensure orderly growth of the broadcasting sector while maximising revenue for the government. It is important to note that there are close to 900 permitted satellite TV channels in the country, along with around 80 teleports, seven direct-to-home (DTH) operators, 1,500 multi-system operators and a large number of cable TV operators. The number of TV households in the country is approximately 183 million and the total revenue of the TV industry is pegged at Rs 58,800 crore, growing at over 15 per cent. The I&B ministry, in its reference, stated that, perhaps due to low entry barriers, non-serious players have been able to obtain TV broadcasting licences. Such licences are even traded or leased to different entities later, it has pointed out. That concern needs to be addressed, and as such auction is a good way forward. It is true that the entry barriers are too low and so are the licence fees. There is a case for the government wanting higher revenues from a fast-growing TV satellite broadcasting sector, especially when the rules of the game are much more stringent for DTH and FM radio players.

Auctions could help here as these might result in arriving at the right market price for a channel, but this is likely to happen at the risk of discouraging local and regional players which lack financial muscle. Also, as Trai has highlighted, separate auctions for uplinking and downlinking spectrum may not be technically feasible as these require coordinated use. There are also issues related to the use of Indian and foreign satellites. Auctioning a complete package for a satellite TV channel is a possibility that could be explored. In case an auction is ruled out due to technical hurdles, Trai must examine the feasibility of one-time entry fee for all TV channels, apart from arriving at a revenue-sharing model with the government. That will check the entry of non-serious players into the broadcasting space while being a source of meaningful revenue for the government.