Cash-starved PTV seeks increase in licence fee

Updated January 22, 2020

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Surprisingly, the state-run television has not been able to develop a marketing plan in almost six decades even though many of private television channels established a few years ago are making profits. — Photo courtesy Pakistan Television Corporation website
Surprisingly, the state-run television has not been able to develop a marketing plan in almost six decades even though many of private television channels established a few years ago are making profits. — Photo courtesy Pakistan Television Corporation website

ISLAMABAD: With no business plan of its own, the cash-starved Pakistan Television Corporation (PTV) is seeking to pass on Rs20 billion additional cost of its operations to the country’s electricity consumers already overburdened by up to 40 per cent increase in their power tariff over the past 18 months.

The PTV board of directors, mostly comprising the corporation’s own employees and other government officials, has approved a financial plan under which Rs20bn would be recovered from power consumers by increasing television licence fee from the existing Rs35 per month.

Interestingly, the corporation has hired three marketing managers from the private sector at a cumulative monthly salaries bill of Rs3 million which firmed up a financial plan by reducing the superannuation age of employees by two years to 58 that would save Rs1.5 million per month. That is the only saving the PTV is contemplating on its own against a financial gap of more than Rs20bn a year or about Rs17 million per month.

Surprisingly, the state-run television has not been able to develop a marketing plan in almost six decades even though many of private television channels established a few years ago are making profits. The government has also stopped funding PTV.

The raise will pass on Rs20bn additional cost of corporation’s operations to electricity consumers

According to documents available with Dawn, the PTV board of directors approved an increase in the licence fee and sought approval from the prime minister.

The increase is part of a business development strategy of the state-run television, which has been devised by the recently inducted business development and marketing team.

Sources said that the business development team had floated the idea of enhancing the licence fee from Rs35 to Rs100 per month which would be collected through electricity bills from consumers of power distribution companies.

The minutes of the PTV board meeting held on Jan 8, state: “The Managing Director informed the Board that the proposed presentation to the Prime Minister of Pakistan for revision in TV fee has been finalised. The Board advised the chairman to request the Prime Minister to give time for the presentation. The chairman stated that taxation matters are approved by the federal cabinet, therefore, the issue of enhancement in TV fee will be presented before the federal cabinet for approval.”

Earlier, in a meeting on Oct 9, 2019, the PTV board admitted that the screen of the state-run television did not attract viewers and it is not getting advertisements even from the government sector. But despite these facts, the idea of increasing the licence fee was floated in the same meeting.

Initially, the PTV board proposed an increase of Rs25 per month in addition to Rs35 in the fee which is being recovered through electricity bills. However, in a recent meeting, no figure was quoted as the sources claimed that the PTV authorities would request the prime minister to increase the fee from Rs35 to Rs100 per month.

In order to justify the increase, as per the minutes of the Oct 9 meeting, “the Managing Director [PTV] informed the board that TV licence fee is collected from consumers all over the world and in Pakistan TV fee is far less than many developed and neighbouring countries. As much as, TV fee has not been enhanced for the last 10 years despite the fact that prices of all commodities have soared manyfold during the period”.

The PTV board was informed that “even Pakistan Post has enhanced its tariff considerably during the period but TV fee could not be revised”.

A former information secretary said on condition of anonymity that PTV started receiving licence fee through electricity bills in 2007 and at that time it was collecting about Rs3 billion. He said that with the passage of time, the number of electricity consumers increased manifold and subsequently, the revenue of PTV has also increased from Rs3bn to over Rs7bn.

“So it is not fair if the PTV management is saying that their revenue has not increased over a period of time,” he said.

According to him, the incumbent management has been brought on the assurance that they would improve television screen as well as credibility of the state-run television while utilising the available resources. “If they have planned to increase the revenue by raising licence fee then there was no need to hire market professionals as an employee of PTV can also generate the revenue through such means,” he added.

When contacted, Syed Ali Bukhari, a member of the PTV board, said it was the responsibility of the people of Pakistan to contribute to the revival of state-run television. He said the PTV board had examined the licence fee structure of other South Asian countries and it [PTV fee] is lower.

Published in Dawn, January 22nd, 2020