Content area
Full Text
Where is the real growth happening for the DTH industry? Is it the urban areas or rural? Though DTH is relatively expensive than cable services, the recent growth is emanating from the rural areas. Growth for the digital segment in rural areas was 34 percent, 49 percent and 64 percent in the past three years. DTH platform gives the rural consumer access to his favorite programs, with the help of generators/ invertors/batteries, which is not possible with the cable services in most of the areas.
Embracing Digitization
The industry has benefited from digitization and the growth is likely to continue in the years to come. The digitization of TV platforms has resulted in better technology and picture and sound quality for viewers. Also more transparent distribution of revenues for stakeholders in the value chain and more bandwidth are becoming available to broadcasters, giving them an opportunity to provide value-added services.
Though DTH has certain advantages such as better picture/ sound quality, better customer service, it also has a disadvantage of price. The DTH players have to pay various taxes such as adjusted gross receipts (10 percent), service tax (2.36 percent), VAT (12.5 percent), CST ( 3 percent) , corporate tax, excise duty (16 percent) , customs duty, and CVD. The local cable operators on the other hand, easily get away with government taxes by underreporting the subscriber base and thus, gaining a clear cost advantage.
The cable operators, with a subscriber base of above 7,500 have to pay luxury tax of `5 per connection. They are opposing the levy contending that they are already paying service tax and there should not be a double taxation. They had further alleged that the state government was discriminating between the cable operators and the DTH service providers. Prior to 2010, the DTH operators were not paying any levy. After 2010, the Kerala government, for instance, had imposed levy of 2 per cent on the DTH service providers.
Bringing down the basic customs duty on imported set-top-boxes and other equipment from five percent to nil will help the DTH and digital...