Thursday, February 25, 2010

Sanjay Behl, CEO, Reliance BIG TV

“License fees rationalization and withdrawal of Customs duty on STBs necessary for DTH Industry Growth”:
The current norms of DTH license mandates payment of License Fee @ 10% of Gross Revenue. This provides a large downside to the DTH operators as its nearest competitor The Cable Operator has no incidence of License fee although the primary content remains the same irrespective of platform. A high license fee regime at 10% and different entry costs structures makes DTH platform unviable to the end user curbing its real growth potential. It also offers absolute non-level playing field between DTH and other distribution platforms. Considering the growth potential of the DTH Industry with an annual addition of 10 million subscribers any incentives offered to the industry will offset any revenue loss to the exchequer in the form of License Fee and Service TaxThe last Union Budget introduced 5% Basic Customs duty on STB to incentivize domestic manufacturing of STBs. This has added Rs 100 crore burden on the DTH industry annually. Since nearly all of the STBs are imported from abroad due to lack of manufacturing capabilities in India, the imposition of Customs Duty has not helped the cause of promoting local manufacturing of STBs. Thus it is imperative that the Customs Duty levied on Digital Set Top Boxes from Customs be withdrawn.

Sanjay Behl, CEO, Reliance BIG TV

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