Trai seeks views on DTH licence fee, bank guarantees

The Telecom Regulatory Authority of India (Trai) has issued a consultation paper seeking views on licence fee payable and bank guarantees (BG) that need to be furnished by direct-to-home (DTH) operators.

In the consultation paper, the regulator sought views from stakeholders on whether the existing definition of gross revenue and adjusted gross revenue as prescribed in the extant DTH guidelines needs any modification. The Trai has also asked stakeholders if there is a need to exclude certain revenue components from the definition of gross revenue in the DTH guidelines.

Currently, the DTH operators are required to pay a licence fee of 8% of adjusted gross revenue (AGR) on a quarterly basis to the ministry of information & broadcasting (MIB), where AGR is calculated by excluding goods and services tax (GST) from gross revenue (GR).


The regulator wants stakeholders to provide a clear, precise, and unambiguous format of exhaustive income heads forming part of gross revenue and an exhaustive list of revenue components (income heads) to be excluded from gross revenue. Another issue up for consultation is whether the licence fee should be levied on gross revenue in place of adjusted gross revenue.

The Telecom Regulatory Authority of India has asked if there is a need to review the initial bank guarantee for the first two quarters since the same has already been reduced for the first two quarters through amendments in DTH guidelines notified on December 30, 2020.

DTH guidelines prescribe a BG for an amount of ₹5 crore for the first two quarters, and, thereafter, for an amount equivalent to a license fee for two quarters and other dues not otherwise securitized. The Telecom Regulatory Authority of India also stated that the department of telecommunications (DoT), on October 25, 2022, carried out amendments in the unified license (UL) agreement for AGR.

As per the amendment, applicable gross revenue (ApGR) shall be equal to GR of the licensee by reducing certain revenue components as mentioned in the amendment.

Further, the definition of AGR is also amended and shall be arrived by excluding some components from ApGR. DoT has also carried out certain amendments for the rationalization of BGs on October 6, 2021.

In view of the aforesaid amendments carried out by DoT, and on the request of DTH association and DTH operators, MIB has sent a reference to Trai on February 2, 2022, requesting Trai to examine the above issues from a policy angle and furnish its recommendations.