‘Govt needs to act quickly on licence fee cut’ - Vikram Kaushik, MD & CEO Tata Sky

Following is the interview of Mr Vikram Kaushik, outgoing MD & CEO of Tata Sky, which appeared in the Financial Express recently. In this interview, Mr Kaushik talks about the need for the govt to reduce license fees as well as taxes for the DTH industry. He also shares his perspective regarding the development of DTH industry in coming years

Despite no relief from the government on reduction in licence fees or lowering of taxes, the DTH industry has grown. Do you still seek government support on these issues?

On licence fee, TDSAT has recommended that it should be levied on adjusted gross revenues and not on gross revenues thereby removing the cost of subscription, hardware and taxes already paid. Even the telecom regulator has recommended reduction to 6% instead of existing 10%. With both tribunal and the regulator in agreement that the DTH industry needs urgent relief, we are hopeful that this will now be translated into administrative action by the government quickly. On taxation, the state governments have to give us relief. We have urged the committee handling GST that entertainment tax should be subsumed under the GST as one single tax.

What are the specific supports you seek from the government?

Globally, the governments are spending a lot to subsidise digitalisation. In India, the DTH industry has willy nilly taken on the onus and the cost of promoting digitalisation and addressbility. In return, all we ask is fair treatment. Trai has recommended some incentives for us like tax holiday for companies in the digital distribution sector, rationalisation of the norms for foreign investment and state level taxes. It is critical that the I&B ministry and the finance ministry act on these recommendations without any further delay.

What has been the highlights of your long tenure with Tata Sky?

The most satisfying aspect of my tenure is the fact that Tata Sky is the premier brand in a new category that we created almost from scratch. It was never easy to sell to the Indian consumer the completely novel concept that you need a set-top-box between you and the TV set to open up a completely new world of television viewing. We did this successfully. We are also proud of our unique organisation that has drawn the best from its parents the Tatas, Star and Temasek in terms of values and business practices. We have built a world class DTH platform. I am particularly proud of the team at Tata Sky, many of whom without doubt, will grow into significant business leaders in time to come.

Can India continue to have six or more DTH players in coming years? Is consolidation on the cards?

I believe that consolidation will happen. Since the players here are well entrenched and have deep pockets and king-size egos, it will take a bit longer. I think India can take only three DTH players. After having spent thousands of crores as investment in the last few years, the time has come when the shareholders will begin to ask, how much longer it will take and when shall we get respectable returns?

Is there a magic number at which the DTH operator can start making money?

There is no single magic number. It will depend on the cost structure of a business, its Arpu and the way it manages its churn. The industry is very fast-moving, much faster than the FMCG business! So agility, innovation and the quality of customer service will be important determinants of success.

Source:

http://www.financialexpress.com/news/gov...t/679204/1