Tomorrow India's BJP-led 18-odd party coalition NDA
government completes three years in office. So does
the information and broadcasting ministry, in a way
the nodal organisation for policy-making relating
to broadcasting, uplinking, and the entertainment
sector. On the occasion of three year's of
existence - at times tumultuous - of the government,
indiantelevision.com has a look at what the government
and the I&B ministry have done, reviews the status
of the policy decisions announced and effected and
also looks ahead to what can be done in the remaining
period of a five-year tenure.
For the last
several months, India's information and broadcasting
(I&B) minister Sushma Swaraj has not held her weekly
Friday durbar for beat journalists which earlier used
to be a regular fixture when over light, but tasty,
snacks and tea the minister and the Press used to
exchange information on the industry in her fifth
floor office at Shastri Bhawan in the heart of the
Capital. The occasion also presented journos with
ample opportunities to get 'exclusives' confirmed
(or denied) and the minister with an audience which
later disseminated the thought process of the government
on various policies relating to the industry.
office staff and the Press Information Bureau, the
government's PR outfit, insist that after having set
a scorching pace during the early days in office,
Swaraj is now taking a breather where policy decisions
are concerned. It is also true that Swaraj, during
her present stint at the I&B ministry and also during
an earlier stint had been involved with some landmark
policy decisions - their outcome notwithstanding -
which showed a green signal for starting a KU-band
direct-to-home TV service in India.
The next session of parliament in mid-Nopvember is
likely to see some action on the introduction conditional
access system (CAS). For this and other issues that
affect the media and entertainment industry, read
Some private players have started
operations in select cities. But feel Policy
& high licence fee may bleed them.
Non-starter till now. Only two
companies have filed for licence in 2002.
Industry status to films industry
A slow starter as only few films
have been financed by FIs or banks which are
still wary of risks in funding films.
Introduced in Parliament. But
awaiting a Parliamentary panel's suggestions
which has not yet submitted report to government
Amendments to the relevant Act
passed in Lower House, awaiting Upper House's
nod amidst criticisms of reducing viewers' choice
and govt. trying to have indirect censorship
FDI in print
Broad policy announced allowing
limited FDI in news category. But players awaiting
FDI in films & advertising
100% FDI allowed through automatic
route. Response has been okay.
FM Radio ***
On 9 November, 1999, a day ahead of the deadline,
Subhash Chandra's Zee group through an associate company
submitted tender documents for its bids for all the
40 cities which were be opened up to private parties
for FM radio broadcasting. Zee was not alone in doing
so, many other high-profile corporates like the Reliance
group, NDTV, RPG, Mid-Day and a PK Mittal company
had also picked up tender documents for starting FM
stations. 450-odd tender documents had been picked
up by various corporates, big and small, including
absolutely local entrepreneurs based in cities like
Jallandhar and Jamnager.
When all the bids were opened finally by 2000, in
all, 67 companies through 360 tenders had bid for
108 FM stations that were up for grabs in 40 cities.
Since it was a new sector many companies had thought
there money was to be made. So, in a trend, reflective
of telecom biddings, the bidders played for high stakes.
For example, 11 FM radio stations for Delhi went for
a whopping Rs 71.25 million each. The successful bidders
in Delhi (reserved price Rs 12.5 million) included
New Media Broadcasting (a Zee associate company that
has since closed shop), Bennett, Coleman and Company,
Living Media, Dream Radio, Hind Broadcasting, Hindustan
Broadcasting, Music Broadcasting, Millinneum Delhi
Broadcasting and Observer Network. The lone channel
in Chandigarh had gone for about Rs 66.5 million to
Cut to 2002. Only about a dozen FM radio stations
are operational and increasingly the players are realising
it's a tough nut to crack with revenues just trickling
in. The bidding fee, coupled with other financial
guarantees, has made this business less viable.
So much so now companies are surrendering their licences.
Music Broadcast Pvt. Ltd-Star combine has done so
for two centres out of their six. Ditto for Millinneum
Broadcasting and Radio Mid-Day for Delhi. Some have
dropped out altogether, including the Ambani-backed
Observor Network and the Zee associate company.
While the private companies blame the government for
framing a policy which was not business-friendly (in
FM radio operations portfolio investment by FIIs up
to 30 per cent, as per finance ministry guidelines,
is allowed but no foreign equity), the government
says that every detail was on paper with the tender
documents and for the high bids the bidders were themselves
to be blamed.
The case as it stands now, it seems Delhi and some
other centres may see some radio stations by next
year, while the industry feels more companies are
likely to surrender their licences as the experience
of those operating in the space are not very encouraging.
It was ironical that while on November 2, 2000, the
government announced the broad policy relating to
KU-band DTH service in India, a day earlier Star India's
then executive director-DTH, Urmilla Gupta, had put
in her papers after waiting for DTH to happen since
The announcement was greeted with cautious optimism
then which is still the case. From the time of announcement
of the policy till date only two applications - from
a Star India front company and Subhash Chandra's satellite
company ASC Enterprises - have been received by the
I&B ministry. These two were also moved early this
Asked about the delay in starting a DTH service, a
senior Star executive had told indiantelevison sometime
back that a costly operation like DTH (a typical DTH
operation would need investment between $ 400-500
million) cannot be started unless the government reviews
its policy guidelines and goes in for some relaxation.
The Planning Commission and some others too, had suggested
that the government should relax DTH guidelines which
seem too stringent.
When the same question was put to the I&B ministry
a senior bureaucrat retorted: "Policy guidelines cannot
be changed for just one or two players. If more come
forward and there is a genuine need, policies can
The existing DTH guidelines in a nutshell state the
*Total foreign investment, including FDI/NRI/OCB/FII,
not to exceed 49%. Control of DTH company with resident
Indian. Broadcasting and/or cable company holding
limited to 20%.
Criticism: This ceiling should be hiked.
*An entry fee of Rs 10 crore, plus annual revenue
sharing with government on 10% basis.
Criticism: The revenue sharing should be waived or
deferred till the fifth year of operation.
*A bank guarantee of Rs 400 million for a 10-year
*Mandatory uplinking from India.
Criticism: Long-term agreements have been done
abroad and cannot be cancelled soon.
* A year's time to set up earth station in India.
*Licencee to ensure a single SMS and open architecture
set top box.
Criticism: There is nothing called open architecture
as every technology and channel encryption is proprietary.
Thereby hangs another tale of a policy failing to
kickstart the area concerned for investments. Last
heard a Bureau of Indian Standards (BIS) committee
is looking into the issue of open architecture and
whether set-top boxes can be really 'open'.
Conditional Access Systems (CAS) ***
The movement to implement conditional access
system in India to bring addressability in Indian
cable homes gained momentum early 2002.
Hectic lobbying by broadcasters, cable industry
and sundry players notwithstanding, Swaraj stood her
ground in a bid to come to the Indian consumers' help
who, allegedly, are having to pay steep monthly cable
subscription fee for viewing cricket matches, saas-bahu
The move to get the amendments to the Cable TV (Network)
regulation Act 1995, which would facilitate implementation
of CAS, got passed in the Lok Sabha late one evening
some months back through a voice vote.
But in the Upper House of Parliament, where the
government does not have a majority, the members of
Parliament wanted a debate during the last session
Amidst a drama of the I&B ministry withdrawing the
Bill and Swaraj holding hectic negotiations with Opposition
MPs to convince them of the benefit of CAS and with
cable operators who threatened to cut off cable service
to dissenting MPs, the issue could not be discussed
in Rajya Sabha.
It's to be seen what happens of CAS during the next
session of Parliament starting mid-November.
The biggest criticism of CAS is that the government
was trying to control what viewers should see or not
see by giving itself the right to determine which
all free-to-air channels (specially news channels)
should be part of the basic tier of service which
would come at a nominal price.
It is another thing that till date the basic tier
price also has not been decided and various permutations
and combinations are still being worked out.
Communication Convergence Bill ***
In all fairness the blame for delay on this piece
of legislation for the convergence era cannot be put
at I&B ministry's doorstep. Because the Bill was introduced
in parliament in 2001 by the then telecommunication
minister Ram Vilas Paswan and after initial confabulation
Swaraj really doesn't have much say in this.
The Bill is with Parliament's Standing Committee on
IT and Telecommunication and the government is awaiting
its reports and suggestions which may or may not get
incorporated into the Bill for re-tabling before policy
makers before being enacted into a law.
Meanwhile, the print medium which fought for decades
for FDI to be allowed into the sector scored a major
victory as an oscillating government finally some
months backs allowed limited FDI in print medium in
the news category - FDI up to 26 per cent in news
category and 74 per cent in non-news category.
But these apart, Swaraj has seen to it that the film
industry gets industry status paving the way for organised
funding of films. This is still to pick up. She has
also worked hard to get Indian films noticed in international
film festivals and the market for Indian films widens
through organised participation at international level.
What the government can do is to speed up the process
of enactment of the Communication Convergence Bill,
review the existing DTH policy without taking into
account the players involved and also see that future
policies for the sector is well thought of and investor
friendly before being finalised.
Swaraj may just take hope from Nehru's famous words
that there are miles to go before she takes a breather.