Chennai: Direct to home (DTH ) companies are hoping the new government will fulfill their long-pending demand to slash licence fees from 10% to around 6% of gross annual revenue. Vikram Kaushik, MD and CEO of Tata Sky said at a media interaction here that multiple taxations are very high, amounting to 40% of cost charges in the DTH industry, and if the government cuts back the licence fee, there is a possibility of expenditure per customer going down by around 20% in subscriptions.

Elaborating further, he added that the government had adopted a high cost licence and taxation model, under the illusion that DTH caters to the elite section of the population, whereas there has been a 25% growth of pay TV market, cutting across various strata of the population. The government is now mulling lowering the licence fee, in addition to rationalising the penal tax components, including service, VAT and local taxes.

Crediting the DTH industry for digitising broadcast services, Kaushik said it is unfair to compare the under-declared cable system to the organised DTH business.

“We take the credit for digitisation and pat ourselves for transparent assessment. The tax rationlisation is needed, not only to meet DTH players OPEX and CAPEX break evens, but also to boost the growth of advance technology addressability in the home entertainment market”, he declared.

Last year, Tata Sky had made 1.6 million customer acquisitions and it is expected to touch the same numbers during the closing of the current year, Kaushik said.