TRAI recommends issuing of DTH licenses for 20 yrs, one-time entry fee of Rs 10 cr

The Telecom Regulatory Authority of India (TRAI) today reiterated its recommendation to the I&B ministry that direct-to-home licenses be issued for a period of 20 years and then renewed for 10 years, and a one-time entry fee of Rs 10 crore be charged in the new DTH licensing regime.

In July, 2014, the TRAI had made a number of recommendations regarding the issues related to the new DTH licensing regime.

However, the Ministry of Information and Broadcasting had proposed, after considering comments from other ministries and departments, to grant DTH license for an initial period of 10 years and thereafter, renewal of license after 10 years.

The ministry had sought TRAI's views on the proposal.

In its response today, the telecom regulatory authority said, It is felt that a longer licence period would provide certainty in the market. Keeping a short license period may adversely affect the potential investment in the sector and would also negate the efforts of the government, inter alia, including the liberalisation of the FDI regime.

Stating that a longer duration of license helps in better futuristic business planning, the TRAI noted that in the telecom sector, the license period under the Unified License (UL) regime is 20 years and renewal is 10 years at a time.

In view of the growing convergence between the broadcasting and telecom sectors, it is logical to align the license period for DTH sector with that in the telecom sector under the UL. In view of above, TRAI reiterates its earlier recommendations, it said.

Under the UL, operators are free to provide all telecom services with one licence.

Currently the license is valid for 10 years.

The TRAI also reiterated its recommendation of one-time entry fee of Rs 10 crore to be charged in the new DTH licensing regime.

The I&B ministry, however, proposed to increase the one-time entry fee to Rs 25 crore for the license period of 10 years.

In its response, the TRAI said, In order to encourage more entrants in the DTH industry, and to compete with the cable industry, wherein there is no entry fee, the TRAI recommends to retain the entry fee to Rs 10 crore.

Currently, the DTH operators also need to pay an initial entry fee of Rs 10 crore.