Increase of FDI in cable sector likely to get early approval

NEW DELHI: With cable operators dithering about switching to digital technologies because of the huge costs involved, a Government proposal for increasing the foreign direct investment in the sector from 49 to 74 per cent is expected to be expedited.

A draft note to this effect by the Department of Industrial Policy and Promotion had been sent to various ministries including Information and Broadcasting and Telecommunications ministries for their comments and inputs last month.

This will help distribution platforms and also moot the proposal for uniform FDI cap across various carriage platforms like DTH, IPTV, mobile TV, HITS and cable companies. I&B Ministry sources told that the Telecom Regulatory Authority of India are expected meet the 18-member digitisation Task Force headed by Additional Secretary Rajiv Takru next week review the progress in digitisation following the notification in this regard. The final recommendations will be placed before the Cabinet.
The sources said that 49 of the proposed 74 per cent will be put under automatic route. The remaining will be through Foreign Investment Promotion Board (FIPB). At present, the current norms for FDI differ on various platforms. For mobile TV, HITS and IPTV, it is 74 per cent, but the permissible foreign investment cap for cable distribution companies is 49 per cent. Of this, up to 20 per cent can be FDI. The balance can be from foreign institutional investors and non-resident Indians among others.

In June last year, Trai had made suggestions to raise FDI for broadcast carriage services like DTH to 74 per cent. The broadcast sector regulator had also recommended reducing the FDI cap for analogue cable firms from 49 per cent to 26 per cent, but the I&B ministry did not agree to it.

This will meant a major increase in the FDI cap in the distribution platforms from 49 per cent to 74 per cent and also enforce a uniform FDI cap across various carriage platforms like DTH, IPTV, Mobile TV, HITS and cable companies. At present, 49 per cent FDI is allowed in cable TV and DTH, while it is 74 per cent in HITS.

The move is expected to help the media which has been clamouring for more foreign investment, and for several foreign investors including expatriate Indians.

At present the FDI norms for Mobile TV, HITS and IPTV are pegged at 74 per cent, for cable distribution companies at 49 per cent of which up to 20 per cent can be FDI while the balance can be from foreign institutional investors, non-resident Indians, and others. For private FM radio, the FDI limit was recently raised to 26 per cent from 20 per cent.

The country has about 106 million cable and satellite homes in India, of which 26 million are DTH while 80 million are cable homes. There are 706 TV channels in India.

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