Government looks ready to lift DTH FDI cap; Zee-AOL-Time Warner and News Corp likely to announce DTH ventures

The floodgates are finally opening up it would seem. Earlier this week, the Union Cabinet allowed 100 per cent foreign direct investment (FDI) in advertising and films. And if reports trickling in from North Block are to be believed, the government is expected to lift a major bugbear of the broadcasting sector in the the next few days: that of the 20 per cent FDI equity cap in Indian DTH ventures. Apparently, sources say, the I&B ministry, in conjunction with the communications and IT ministry and the Prime Minister's Office, is likely to raise the FDI bar to 49 per cent in DTH ventures. Other anomalies in the DTH policy announced last year like cross media restrictions are to be eased too, sources indicate.

A huge bash has been planned by AOL Time Warner CEO Gerald Levin and the Zee Network chairman Subhash Chandra in Delhi next week as a celebration of the new freedom, sources reveal. Apparently, the duo is likely to announce a further cementing of their relationship in the form of a DTH venture for India, the sources say. Time Warner and the Zee Network announced a distribution partnership in the form of a Zee-Turner joint venture in December 2001.

Apparently, News Corp chairman Rupert Murdoch is also slated to announce similar plans at the same time, sources point out. He was, at the time of writing, slated to arrive in India on 14 March while Levin is expected to touch down in India on 12 March. Star India officials refused to make any comments when asked about its DTH plans. Star India CEO Peter Mukerjea is reported to be in Shanghai along with Star Asia chairman James Murdoch.

News Corp's ISkyB venture has been on the backburner for the past five years, thanks to the Indian government's fear of loosening the strings on media and intense lobbying from rivals.

But Star India has been working on reviving it with Star Asia executive Altaf Ali Mohammed working on a feasibility plan for over a year now. Earlier it was examining a proposal to launch its ISkyB project in partnership with the then government owned long distance carrier, VSNL, sources reveal. The plan was later aborted and today VSNL is in the private hands of the Tata group.

If the reports prove right, Murdoch will be battling the combined might of AOL Time Warner and former partner Subhash Chandra, which may make it appear to be a fight of unequals. But then the septuagenarian, who became a father after many years recently, loves the scent of battle and coming out on top.

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