Indian government is believed to be considering a proposal
to lift the 20 per cent foreign direct investment (FDI)
cap in direct-to-home broadcasting ventures to 49 per cent.
The difference this time: the voting rights will be capped
at 20 per cent.
It is also proposing to the amend the cross media restrictions
in a similar manner taking the cap up to 49 per cent but
limiting the voting rights to 20 per cent, a senior information
and broadcasting ministry official told indiantelevision.com
late last night.
The lifting of the 20 per cent FDI ceiling means that DTH
ventures could be in a position to attract enough capital.
The inability to generate enough capital to flag off a DTH
service has been a major constraint for Indian companies
as they have been loathe to wait out the long gestation
period that such a project would require to start generating
profits. But one has to wait and watch whether foreign investors
would be willing to cede control of a venture in which they
would be pouring in hundreds of millions of dollars.
The hike in the cross media restriction limit could also
prove attractive and will allow integrated media companies
to exploit their content properties across another platform
such as DTH. The key question is whether they would be willing
to give up their voting rights.
Officials in the I&B say that an opinion has been sought
from the department of company affairs on the issue of amending
the FDI and cross media barriers and it has opined that
prima facie it seems like the proposed changes seem all
However, this is not the first time that smoke signals have
been sent out that the DTH regulations introduced in 2000
would be made more investment friendly. On several occasions
in the past the government has made similar announcements
only to find that it has not been able to translate it into
If the limit is removed and the norms are liberalised then
it is quite likely that a risk-taking entrepreneur would
take the plunge into DTH. One of the most interested players
in the launching DTH in India has been global media baron
Rupert Murdoch but his foray has been nipped in the bud
by fearful rivals and an even more reluctant government.
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