DTH Operators are no longer allowed to assign their Licence Agreement as Security to banks/ financial institutions as a part of tripartite agreement to get financial assistance.
As per an MIB order dated 05 October 2015, the Government has cancelled the provision of Tripartite Agreement between DTH players, Financial Institute/ Bank and the government, being assigned as a Security. This was provisioned earlier in an order dated 03 December 2009.
The ministry had decided to go for tripartite agreements as it had been receiving requests from DTH licensees for assignment of their licence agreement as security to the banks. However, there were no prescribed terms and conditions based on which the ministry would consider such requests.
Hence, the ministry had examined the matter in light of the provisions contained in Articles 2.2 & 6.4 of the DTH Licence Agreement and followed the procedure prescribed for the telecom sector and came up with the provision.
Three other players, namely Tata Sky, Airtel Digital TV and Videocon d2h, have already achieved operational breakeven. Reliance Digital TV and Sun Direct are led by big corporate entities. In such a scenario, DTH experts now believe that their businesses have grown enough so that they do not need the licence agreement as collateral for loans so that they do not need the licence agreement as collateral for loans.