The Hindu : Front Page : Stakeholders’ views sought on FDI in broadcasting

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Wednesday, Mar 05, 2008
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Stakeholders’ views sought on FDI in broadcasting

Anita Joshua

NEW DELHI: With the government open to reviewing foreign investment limits across the broadcasting sector except in news channels and cable networks, the Telecom Regulatory Authority of India (TRAI) has sought to reopen the debate by issuing a consultation paper to solicit the views of stakeholders.

The consultation paper has been issued as a follow-up to a communication received from the Union Information and Broadcasting Ministry in December seeking TRAI’s recommendations on the government’s proposal to increase the limits in Direct-to-Home (DTH) television, teleport, satellite radio, FM radio and Headend-In-The-Sky (HITS). In the case of cable networks and news and current affairs channels, the government is against any increase from the existing limits.

The current limit on foreign investment — both Foreign Direct Investment (FDI) and Foreign Institutional Investors (FIIs) together — on cable networks is 49 per cent. As for television news channels, the limit is 26 per cent (FDI and FII).

While the Ministry’s communication does not cite any reason for retaining the cap on foreign investment in news channels, its reason for continuing with the prevailing ceiling in cable network is that a further hike would result in control shifting to the foreign partner. Since cable television with a reach of approximately 68 million households is still the pre-dominant mode of distribution of broadcast channels, the Ministry’s contention is that “it would not be desirable to increase the level beyond 49 per cent and allow the management control to pass on to the foreign investors”; particularly in the absence of alternative modes of delivery to the subscriber.

As for teleport, DTH, satellite radio and HITS, the Ministry has suggested that the foreign investment component can be raised to 74 per cent. In the case of FM radio, the Ministry is open to allowing up to 24 per cent as against the existing 20 per cent. At present, teleport and DTH are allowed 49 per cent foreign investment while satellite radio and HITS do not have any policy relating to foreign investment.

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