In recent developments, the Ministry of Information and Broadcasting (I&B) has approved revised guidelines for Direct-to-Home (DTH) broadcasting services. This includes allowing 100% Foreign Direct Investment (FDI) and extending the licence period to 20 years. Previously, DTH licenses were only issued for a period of 10 years.
Direct-To-Home (DTH) Broadcasting Service involves the distribution of multi-channel TV programmes via a satellite system in the Ku Band. This system provides TV signals directly to a subscriber’s premises. The Ku-band forms part of the electromagnetic spectrum and is predominantly used in satellite broadcast communications, functioning within an approximate range of 12-18 GHz radiofrequency.
Changes in License Duration and Fee
The revised I&B Ministry guidelines now state that the licenses will be issued for a period of 20 years, rather than the 10-year term previously set. Furthermore, these licenses are renewable for a 10-year term. The license fee calculation has also undergone changes. It has been adjusted from 10% of Gross Revenue (GR) to 8% of Adjusted Gross Revenue (AGR), which is arrived at by deducting GST from the GR.
The Adjusted Gross Revenue is the usage and licensing fee charged to telecom operators by the Department of Telecommunications (DoT). This fee is categorized into spectrum usage charges and licensing fees. As per the newly revised guidelines, broadcasting companies must pay their license fees on a quarterly basis, as opposed to the former annual basis.
The Benefit of Infrastructure Sharing
Another significant change to the guidelines is the permission for DTH operators to share infrastructure. This means that distributors of TV channels can now share common hardware for their Subscriber Management System (SMS) and other related operations. Infrastructure sharing can lead to more efficient use of satellite resources and reduce the costs borne by consumers.
Effect on Foreign Direct Investment
The Ministry of Commerce and Industry had in the past proposed 100% FDI in the DTH sector. However, due to the guidelines issued by the I&B Ministry, the FDI was capped at 49%. With the new guidelines now in place, there is hope for increased investment, operations, and growth within the DTH sector.
The Shift towards OTT Platforms
Despite these changes in DTH regulation, the reality is that the rise of Over The Top (OTT) services has impacted DTH subscription numbers. OTT platforms offer consumers a combination of attractive content and subscription packages, making them increasingly popular.
Recent reports by the Telecom Regulatory Authority of India (TRAI) highlight this shift, showing a significant decline in DTH services. Data shows that there is a 25% drop in the average active DTH subscriber base, with more Indians preferring OTT over DTH services. The flexibility and convenience of OTT platforms, coupled with the declining cost of data services, have contributed greatly to this trend.
The Future of DTH and OTT in India
India, one of the largest markets for audiences globally, boasts an estimated 200 million cable and satellite households. Nevertheless, the future of DTH services in light of the rising popularity of OTT platforms remains uncertain. While the convenience of OTT platforms is undeniable, it is worth noting that the accessibility and reliability of internet connections across India remain uneven. This could limit the reach and popularity of OTT services. It therefore seems premature to suggest that OTT platforms will entirely replace DTH or cable connections soon.
The key focus for broadcasters should be on delivering compelling and authentic programming and entertainment. A strong combination of technology and competitive pricing is what will ultimately win the viewer’s favour.