Trai for 74% FDI in cable TV, 49% in news channels & FM

MUMBAI: Stepping up the liberalisation drive, the Telecom Regulatory Authority of India today recommended raising the foreign investment limit in news channels and FM radio to 49 per cent and cable TV to 74 per cent.

This is in contrast to the government‘s stance which had proposed no changes in the existing cap of 49 per cent for cable and 26 per cent for news and current affairs. In the FM radio sector, the government had proposed to up the limit marginally from 20 per cent to 24 per cent.


For DTH (direct-to-home), teleport and HITS (Headend-In-The-Sky), Trai‘s recommendations are in line with the government proposal. Trai has suggested lifting the cap to 74 per cent (from 49 per cent) for DTH and teleport. In case of HITS (where there is no FDI policy as of yet), the sector regulator also wants the limit to be at 74 per cent.

For mobile TV, Trai has recommended 74 per cent foreign investment limit. At present, there is no policy on FDI in mobile TV.

On satellite radio, the sector regulator will be sending its recommendations separately. Trai has maintained status quo in case of uplinking of non-news TV channels and downlinking of TV channels where the foreign investment limit is at 100 per cent.

Justifying the reason for raising the cap on cable networks, Trai said the issue is to have a framework which will encourage flow of funds into this segment. "This will then lead to consolidation in the last mile cable operations as well as upgradation of the network. It is also expected that consolidation will lead to greater competition in the last mile because large corporate entities cannot be easily stopped from expanding their area of operation into the territory served by the rival cable operators. This will greatly benefit the consumers," the regulator pointed out.

Further elaborating, Trai said: "The roadmap should protect the existing investments in the cable networks and guide the incremental investments towards upgradation and modernization of the infrastructure."

The information and broadcasting ministry had expressed concern that being the backbone of TV distribution system, it wasn‘t advisable to allow cable networks to pass into foreign hands.

Terming this as an overcautious approach, Trai said "it is inconceivable that even after consolidation all these networks will pass on into foreign hands." Besides, there are already four functional DTH operators, and three more are in the pipeline. All these DTH operators are large corporate entities and they would provide competition to the incumbent cable operators, whether foreign owned or domestically held. The cable network will be in a better position to face competition if revamping through higher investment is accomplished.

As for raising the cap on news, Trai said it would not result in management or editorial control getting transferred to foreign entities. "The better way to ensure that subversive content is not broadcast through TV channels is by having proper content monitoring and regulation through content code, instead of using foreign investment limits as the the tool for this purpose," Trai added.


The recommendations also cover the procedure for approval and suggest that within the composite foreign investment limit of 74 per cent (wherever applicable) for carriage services, foreign investments up to 49 per cent may be permitted under the automatic route, beyond which FIPB approval would be required as prescribed for the telecom sector.

"For content services, it has been suggested that FIPB approval should be required for foreign investments," Trai said.

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