DTH Services Are Finally Close, Licences Expected To Be Auctioned In December

We have been hearing about Direct-to-home (DTH) services launching in Pakistan for more than a decade now. You might have seen ProPakistani cover that DTH auction is close or Pakistan will soon get DTH services many times during the past decade.

Every time the auctions came close, PEMRA deemed the service uncompetitive due to the lack of applicants or possibly very few expectations of DTH ever coming close to cable operators. Making ample funds from DTH license auction is obviously the major factor behind this and without a competitive market it might not have been possible. Not that there were enough efforts made by PEMRA anyway to realize the DTH auctions.

Current Situation

Finally, it seems, DTH licenses will be auctioned this December. The market has become more competitive now and there are more companies looking to enter the market with DTH services. Digital cable has increased over the past few years. Nayatel, PTCL and OSN have been at the forefront in providing high quality television services in most cities across the country.

Despite there being a presence of digital transmission services, HD transmissions have been rather distant with only a handful of channels providing HD service. Perhaps the release of DTH will help in that aspect as well.

The delay in services has also promoted the illegal distribution of Indian DTH services in Pakistan. Satellite equipment and subscriptions are sold right under the nose of federal agencies and all of the retails go untaxed without government authorization. The illegal distribution has become more mainstream in recent years, as retailers display ads on television and newspapers. PEMRA claims that new license auctions will curb illegal sales and that FIA has been working on stopping the international DTH services.

Licensing Status

While previously all efforts for DTH license auctions were being made internally, PEMRA and the Digital Strategy Consulting Services Switzerland inked a contract back in March 2015 to launch DTH services this time around. The Swiss firm assisted PEMRA in preparing eligibility criteria, license templates, bidding methodology, determination of base price, recommendation on number of licenses to be auctioned and the duration of licenses.

Licensing Regime for the award of DTH licenses including Eligibility Criteria, SOQs, Terms and Conditions, Bidding Procedures etc. is now under process and tentative deadlines have been released. The timeline for the whole process is listed below.

Auction Terms

Applicant companies will pay PEMRA an amount of Rs 500,000 for consideration of being shortlisted for the auction. Shortlisting of applicants will be based on the eligibility criteria. Only companies with a majority share by a Pakistani will be able to apply under the condition that the owner is not funded by any foreign government or organization. Applicants are also under condition, that they must not already be a Licensee who owns, controls or operates directly or indirectly any broadcast media license or landing rights permission

The Base price for each license has been set at Rs 200 million whereas all licensees will have to pay a variable license fee of 2% of the gross revenue generated (excluding the first three years) plus a fixed fee of Rs 10 million. Bidders would be bound to pay a pre-bid deposit which is 15% of the initial bid and then raised to 15% of the final license fee. All licensees will have a duration of one year to begin their DTH services by using either Pakistani or foreign satellites.

Licensee Rights

After the auction, licensees will be authorized to uplink their services from within Pakistan. Licensees will be under strict order to distribute channels that are authorised for viewership by PEMRA. Initially, DTH services will be limited to 20 in-house thematic channels per license and only one license per organization. License duration has been finalized to be 15 years on a nonexclusive basis as three licenses will be sold this year.

Licensees will be able to broadcast television and radio channels alongside value added services which may include video on demand and many other features. Owner companies will also have the choice of launching internet services which are limited to browsing and streaming under the stated rules.

Conclusion

We have been waiting for DTH for a long time now and possibly this could finally be the last time we are saying that ‘DTH is finally close’. DTH might promote high quality television channels that the public has been longing for such a long time. If HD services with advanced features do go mainstream, it could mean healthy competition that is in favor of the general public meaning cheaper television services available across the country.

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