MUMBAI: Bogged down by multiple taxation and regular hikes in taxes like service and entertainment, Indian direct-to-home (DTH) service providers have decided to pass on the burden to their customers.
DTH operators like Dish TV, Tata Sky, Airtel digital TV and Videocon d2h are raising base pack prices. In the case of Dish TV and Videocon d2h, the uptick is to the tune of 10 per cent for all their packages.
They say an increase is inevitable as they have been absorbing taxes for far too long and the industry viability itself is coming into question because the players have been bleeding.
Airtel digital TV has hiked its base pack price from Rs 158 to 175 per month effective 9 April. Videocon d2h’s price hike comes into effect from 10 April. Dish TV was the first to hike prices of monthly subscription packages by 10 per cent effective 4 April.
Tata Sky has increased prices for individual plans unlike the uniform hike by Dish TV and Videocon d2h. Some like Reliance Digital TV are still adopting a wait and watch policy.
However, the DTH operators have also provided price protection to their customers by giving them an option to save money by recharging for a longer duration.
Under the regulation, existing customers are protected from a price hike which can only be implemented after six months from the day it comes into effect.
Dish TV COO Salil Kapoor says that DTH operators were absorbing the burden of service tax till now and have decided to pass it on to the customers to reduce that burden.
“We have hiked prices by 10 per cent across the board. We are just passing the burden of service tax on to the customers,” says Kapoor.
Tata Sky MD and CEO Harit Nagpal is of the opinion that the price hike is not just about service and entertainment tax.
“The input costs have gone up, the cost of content has also gone up plus there is inflation. The DTH operators have been dropping prices till now so this (price hike) is just one little step in the right direction by DTH operators,” explains Nagpal.
Videocon d2h CEO Anil Khera elucidates: “Service tax has been increased and entertainment tax in many states has also been increased so we are gradually passing the burden on to the customers.”
A Reliance Digital TV spokesperson said that the company is evaluating hiking prices, “Yes, we are at present evaluating different options. At this stage, it is difficult to say how much would it be and when,” the spokesperson states.
The spokesperson adds, “Also, as an industry we are heavily burdened with statutory levies (to the extent of around 35 per cent) – the recent decision to increase the Customs Duty on STBs by 5 per cent has only added to this burden.”