Stakeholders welcome easing of FDI norms for broadcasting; want DAS to move faster

NEW DELHI: The broadcasting sector and particularly the cable sector welcomed the government’s announcement bringing almost the entire broadcasting sector under the automatic route for foreign direct investment.

Stakeholders said the step was very timely as the country was on the verge of completing the transformation to digital addressable systems for cable television.

The government had this morning announced opening up setting up of teleports, direct-to-home, cable networks, headend-in-the-sky and mobile television to 100 per cent foreign direct investment through the automatic route.

The announcement from the Prime Minister’s office said this had been done with the objective of providing major impetus to employment and job creation in India.

However with regard to the broadcasting sector, it was made clear that infusion of fresh foreign investment beyond 49 percent in a company not seeking license/permission from sectoral Ministry, resulting in change in the ownership pattern or transfer of stake by existing investor to new foreign investor, will require approval of the Foreign Investments Promotion Board.

However, Hinduja Ventures Ltd whole-time director and former president of the MSO Alliance Ashok Mansukhani told that these changes would have real meaning only if the government is able to bring back DAS ‘on the rails.’

He said that just around six months were left for the final Phase of DAS and Phase III was already mired in several cases all over the country. Although the Supreme Court had directed that these be transferred to Delhi High Court, this process had not been completed with the result that the High Court could not proceed to hear the matter.

Phase III was to cover 7,700 cities and Phase four is to cover 61 million (6.1 crore) television households, but all this will be derailed unless the government is able to implement the different phases.

In a general reaction to the liberalization in FDI, FICCI Secretary-General Didar Singh said“There is no doubt that India today is the most preferred investment destination in the world. While the attraction of our market is known to all, there is now even more reason for global investors to commit themselves for making and doing business in India. Our government is translating words into action and after having made a strongest pitch ever to global investors, it if following up with a major overhaul of the FDI framework so that the interest generated is captured in the form of higher investment flows which are on a rise since the last two years”.

National Cable and Telecommunication Association President Vikki Choudhuri, while welcoming the move, said the government should also immediately re-look at the regulations which are not favourable for BPOs and the last mile operator.

Cable Operators Federation of India president Roop Sharma said that while the relaxation for cable and multi system sector going through automatic route was welcome, it would not serve any purpose unless the last mile operator is educated about this.

As a result, she said it would only lead to creation of monopolies in the hands of a few large cable and MSO operators. This was because cable operators in smaller towns never even came to know about the changes since no effort was made by the government to educate them.

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