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Business Standard
30-05-2025
- Business
- Business Standard
DTH firms under pressure as govt demands Rs 16,000 cr as licence fees
The Information and Broadcasting Ministry has issued notices demanding Rs 16,000 crore from four private direct-to-home (DTH) companies for unpaid licence fees — a move that is likely to hurt the struggling sector, The Economic Times reported on Friday. The notices demanded principal dues and accumulated interest from Bharti Telemedia (parent of Airtel Digital TV), Tata Play (formerly Tata Sky), Dish TV and Sun Direct. Industry representatives have told the Ministry the demand is not enforceable as the matter is before High Courts, the Telecom Disputes Settlement and Appellate Tribunal and the Supreme Court. Tax demand exceeds FY24 revenue The ministry's demand exceeds the four companies' combined FY24 revenue of Rs 10,230 crore, which is a 5 per cent decline from Rs 10,837 crore they earned in FY23. The sector lost eight million subscribers between FY21 and FY24. As of December 2024, the active pay DTH subscriber base was reported at 58.22 million. Final figures subject to changes, says MIB In its communications to the companies, the ministry said that the final figures are provisional and subject to reconciliation based on the outcomes of ongoing audits by the Comptroller and Auditor General and pending court verdicts. Dish TV, in its Q4 FY25 regulatory filing, said it had received a directive from the ministry on April 22 to pay Rs 6,735 crore in licence fees, including interest for the period from the issuance of its DTH licence through FY24. The company has formally disputed the demand. As of FY24, Tata Play has received a cumulative demand of Rs 3,628 crore, including Rs 1,401.66 crore in interest. Meanwhile, Sun Direct was issued a demand of Rs 1,051.84 crore, excluding interest, as of March 2024. SC upholds states' right to levy entertainment tax Compounding the industry's financial woes, the Supreme Court on May 23 upheld the constitutional validity of entertainment taxes imposed by state governments on cable and DTH television services. The court ruled that states have the legislative right to tax the entertainment aspect of these services, even if the broadcasting function is already covered under the Centre's service tax regime. Appeals by DTH operators rejected The Supreme Court dismissed appeals by leading DTH providers including Tata Sky, Dish TV, and Sun Direct, who had contested various state entertainment tax laws. The companies argued that the taxes were unconstitutional due to the Centre's existing service tax on broadcasting. The court, however, upheld the states' authority to impose such levies.
Time of India
30-05-2025
- Business
- Time of India
DTH cos asked to pay ₹16,000 crore licence fee dues
MUMBAI: The ministry of Information and Broadcasting has issued demand notices totalling ₹16,000 crore to the country's four private direct to home (DTH) operators over outstanding licence fees, industry sources told ET, potentially compounding problems for an industry battling dwindling revenues and subscriber losses to OTT platforms and DD Free demands cover both the principal amount and accrued interest on the dues, said the officials cited above. They said that the operators have communicated to the government that the notices cannot be enforced, as the matter is sub judice in various High Courts, the Telecom Disputes Settlement and Appellate Tribunal (TDSAT), and the Supreme Court. Dish TV CEO Manoj Dobhal acknowledged the pressures facing the sector. "The DTH industry is navigating a difficult phase, with factors such as subscriber churn driven by competition from OTT platforms and DD Free Dish, along with taxation and regulatory issues,' Dobhal said. 'Given these challenges, we would have hoped for a more supportive approach from the authorities." To be sure, the licence fee demand is more than the combined revenue of the four private DTH operators, which stood at ₹10,230 crore in FY24, down 5% from ₹10,837 crore the previous year, as per regulatory filings. In its correspondence, the ministry said the figures are subject to reconciliation based on the outcome of audits by the Comptroller and Auditor General (CAG), as well as pending court decisions. In its Q4 FY25 regulatory filing, Dish TV disclosed that it had received a communication from the ministry dated 22 April 2025, directing the company to pay ₹6,735 crore toward licence fees, including interest, covering the period from the grant of its DTH licence up to FY24. The company added that it has disputed the demand in its response. As of FY24, Tata Play has received a consolidated demand of ₹3,628 crore, including ₹1,401.66 crore in interest. Sun Direct has received a demand of ₹1,051.84 crore (excluding interest) as of March 2024. As of March 2025, Dish TV had made a provision of ₹4,612 crore towards licence fee dues. Tata Play had provisioned approximately ₹2,002 crore and recognised a further ₹2,280 crore as a contingent liability. Bharti Airtel had made provisions of about ₹3,426 crore as of 31 March 2024. Bharti Telemedia, Tata Play and Sun Direct declined to comment on the matter. A senior DTH executive added that the ministry has raised similar demands in the past even when legal disputes remain unresolved. 'DTH operators have repeatedly urged the ministry to exclude pass-through costs, such as content expenses, from the licence fee calculations and to address the issue of double taxation. However, these concerns are yet to be addressed,' the executive said. The DTH industry lost 8 million subscribers between FY21 and FY24. The active pay DTH subscriber base stood at 58.22 million, as of December 2024. The Telecom Regulatory Authority of India (TRAI) has, on two occasions, recommended phasing out the DTH licence fee by the end of FY27. Since 2020, TRAI has issued 17 recommendations aimed at reforming the broadcasting sector. The ministry of information and broadcasting has historically calculated the licence fee as 10% of gross revenue, without deductions. However, in 2020, it amended the DTH guidelines to set the licence fee at 8% of adjusted gross revenue (AGR).
