Three giant Indian DTH players found themselves affected by media regulator TRAI’s proposed new rules yesterday, if India’s government passes the proposals into law.
In essence India’s Telecom Regulatory Authority (TRAI) will limit vertically integrated broadcasters (such as the Zee Group, or Sun) to ‘control’ only one distribution platform operator. Zee, for example, controls the Dish TV DTH platform as well as Siti Cable. Sun, for example, controls its own DTH operation, Sun Direct as well as Sumangli Cable.
TRAI is suggesting that a year be allowed for any restructuring that might be necessary.
The upside to the proposal is that the current 10-year DTH licenses held across the industry are to be automatically extended to 20 years. Another is that the so-called “license fee” tax paid by each DTH operator is to be reduced from today’s 10 percent to 8 percent, and while most DTH broadcasters had been calling for the tax to be reduced to 6 percent the consensus feeling is that this was a definite step in the right direction.
There are also other changes, not least an easing of the foreign investment rules, which will mean that Star India will be able – if it wishes – to increase its stake in TataSky from today’s – in effect – 30 percent minority position to a controlling stake.