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Satellite radio to operate without commercial ads: Trai
Posted online: Thursday , June 05, 2008
Satellite radio in the country will be devoid of commercial advertisements and players will require two licences/permission to operate the business, according to the draft of the Satellite Radio policy cleared by Telecom Regulatory Authority of India (Trai) on Wednesday. On both the issues, Trai has concurred with the ministry of information and broadcasting. The regulator, in agreement with the ministry, has made a distinction between the carriage and the content services and recommended separate licence/permission for both. One type of licence is envisaged for providing the satellite radio service for carriage and broadcasting of channels, and the other mandates the player to obtain registration for satellite radio channels, which he will in turn provide to the satellite radio service operator for broadcasting. However, according to Trai, the same player can also hold both types of licences. The telecom regulator has recommended auctioning of the licences if the number of eligible applicants exceed the number of licences being offered, depending upon the availability of spectrum and satellite. The licence will be for a period of ten years initially, with provision for further extension for ten years. The licencee will have to pay an annual licence fee of 4% of the gross revenue
On not allowing advertisements, the ministry of information and broadcasting had stipulated that the satellite radio service provider will not carry any commercial advertisements on its service except two minutes per hour of promotional material about the satellite radio. Although broadcasters and FM radio had made a case for curtailing the duration of ads or not allowing ads at all for the fear of losing ad-revenue, The WorldSpace Enterprise, the existing satellite radio service operator and stakeholders from the advertisement industry had asked for advertisements to be permitted. Trai has held that the existing service is operating on a subscription revenue model without advertisements, that model shouldn't be tinkered with. WorldSpace had said that it has made significant investments of around $400 million (Rs 1,600 crore) to realise its India operations and wanted the One Time Entry Fee (OTEF) to be restricted to Rs 2.5 crore. Trai is of the view that the base value of OTEF should be raised to Rs 5 crore.
The Trai document proposes that terrestrial repeaters should be permitted but should only be allowed to re-broadcast satellite signals and not locally produced and inserted programmes. This is meant to partially address the fears of FM radio players who think of allowing repeaters. Allowing repeaters in satellite radio can launch straight competition to FM radio and at a time when we are still bleeding, we can't afford that, said a CEO of a reputed FM radio.