Telecom giants Reliance Jio Infocomm and Bharti Airtel are reportedly at fighting again. According to a report in Economic Times, telecom operators Reliance Jio Infocomm and Bharti Airtel are once again at odds over waiving the licence fee for direct-to-home (DTH) operators, with the former advocating for retaining the fee and the latter calling for its eventual phase-out.
Both companies presented their arguments to the Telecom Regulatory Authority of India (TRAI) during its consultation on the “Framework for Service Authorisations for the Provision of Broadcasting Services under the Telecommunications Act, 2023.”
Airtel has Tata Play on its side
Airtel has called for the complete removal of the licence fee, arguing that DTH should be treated on par with other TV distribution platforms, which are exempt from such charges. Tata Play, also urged TRAI to implement this change promptly, and further called for the removal of cross-media restrictions that limit broadcasters to owning no more than 20% of a distribution company. There have been speculations that Airtel and Tata Play are in merger talks.
What Airtel wants
Airtel has proposed that the licence fee—currently levied on content revenue from DTH operators—be shifted to broadcasters, who ultimately benefit from the revenue. Additionally, Airtel suggested that the definitions of Gross Revenue (GR), Applicable Gross Revenue (ApGR), and Adjusted Gross Revenue (AGR), as set by the Cabinet for the telecom sector, should also apply to DTH operators.
What Reliance Jio wants
On the other hand, Jio has strongly opposed the waiver, arguing that DTH services already benefit from free spectrum allocation, which is provided at significantly lower-than-market rates. Jio contends that this creates a competitive imbalance, disadvantaging cable TV and IPTV providers, and results in revenue losses for the national exchequer. Jio further argued that waiving the licence fee for DTH services, based solely on comparisons with other platforms, would be unconstitutional, as it would fail to consider the unique advantages DTH receives through free spectrum. Jio reportedly referred to the Indian Constitution, which mandates equal treatment only where distinctions are irrelevant.
Jio emphasized that DTH operators, which avoid significant investments in terrestrial fibre or cable networks by relying on free spectrum, should not receive fee waivers, while fixed-line and mobile service providers—who invest heavily in infrastructure—continue to pay licence fees.
TRAI recommendations
In August 2023, TRAI recommended that the Ministry of Information and Broadcasting (MIB) reduce the DTH licence fee to 3% of AGR from the current 8%, with a plan to phase it out entirely by FY27. This recommendation aims to bring DTH into parity with other TV distribution platforms such as cable TV, HITS, and IPTV.
Jio also urged TRAI to conduct an independent analysis of the competitive advantages DTH operators gain from free spectrum allocation, without relying solely on past recommendations.
Airtel owns the DTH operator Bharti Telemedia, which operates under the Airtel Digital TV brand, while Jio owns cable networks like DEN Networks and Hathway Cable & Datacom, and holds a significant stake in GTPL Hathway.
TRAI’s consultation is part of its efforts to develop a unified authorisation framework for broadcasting services under the Telecommunications Act, 2023, which replaced the Indian Telegraph Act, 1885. This framework aims to streamline regulations for DTH, IPTV, and radio broadcasting.
Meanwhile, the MIB has previously sought dues from DTH operators based on 10% of their gross revenue, without deductions. DTH operators, however, have disputed these demands, making various deductions under different income categories. As a result, the four private DTH operators could face potential licence fee liabilities exceeding Rs 15,000 crore, and they have challenged the MIB’s demand notices. The case is currently pending before the Supreme Court.