KOLKATA: The new DTH guidelines issued by the ministry of information and broadcasting (MIB) can have far-reaching impact on the sector, such as increasing the potential liabilities of incumbents when renewing their licenses. The top four DTH operators are liable to pay Rs 7,700-8,000 crore, credit rating agency Crisil said. Their Ebitda for the current fiscal is estimated at Rs 7,000-7,500 crore.

Few days after releasing the amended guidelines, the ministry said that the issue of fresh license to the existing licensees will be subject to their clearing all dues. “New licensing guidelines issued by the MIB on 30 December 2020, for providing direct-to-home (DTH) broadcasting service could significantly increase the potential liabilities of incumbents when renewing their licenses,” Crisil said.

It also added the matter has been discussed at various legal fora over the past decade and continues to be sub judice. Clarity with respect to the final dues, timelines for payment and the debt-equity funding mix to pay up the liability will be crucial to ascertain the cash-flow impact on the DTH operators.

“DTH operators supported by strong sponsors will be able to sustain their credit profiles notwithstanding the expected potential liability. Their credit profiles are also supported by healthy cash accrual, strong balance sheets and high financial flexibility,” the credit rating agency added.

Crisil said it would continue to monitor the developments on this and take appropriate action as and when required.