Reliance Bluemagic receives LoI for DTH ops

MUMBAI: The direct-to-home broadcasting segment is set to witness some more action with the government clearing the application of the Anil Dhirubhai Ambani Enterprises. The proposed DTH project under the brand name Reliance Bluemagic, a subsidiary of Reliance Energy, has received the letter of intent (LoI).

This will be the fourth licence issued by the government to a private operator. Nonetheless, even after the letter of intent is issued, it would be a while before the letter of approval and an actual DTH license is handed over to the Reliance Bluemagic.

According to sources close to the government and DTH developments, the information and broadcasting ministry has issued the LoI. "The absence of any foreign investment or partner has simplified matters," the officials pointed out.

When contacted, senior officials at Reliance refused comment on the developments.

Once the letter of approval is issued, the company would be granted a licence after depositing a bank guarantees of Rs 100 million.

Reliance Bluemagic had applied under for a DTH licence under the name 'Reliance Skymagic last year. However, News Corp had issued a caution notice, asserting 'Sky' was its registered trademark under which the company runs its DTH operations in UK under the name of BSkyB. Consequently, the trademark Sky was also registered in India.

In the present scenario, besides pubcaster Prasar Bharati, which manages DD Direct, there are two private DTH service providers. Dish TV and Tata-Sky already operating. Although South Indian media major Sun Group's Sun Direct TV received the LoI last year, it has yet to kick off operations.

The government has set stringent entry norms for DTH operators. According to the norms, the applicant has to be registered under the Indian Company's Act, 1956, while its total foreign equity holding should not exceed 49 per cent, of which not more than 20 per cent should be the FDI component. It also says the applicant company must have Indian management control, with majority representatives on board, and the company's CEO must be a resident Indian.

Reliance's presence in DTH, FM radio and other segments of media and entertainment means that the group will enable itself to leverage its brand across all platforms.

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