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TRAI proposes 74 percent foreign investment in DTH

New Delhi, June 30 (IANS) India’s broadcasting industry watchdog Wednesday recommended increasing the cap on foreign investment in direct-to-home services from the current 49 to 74 percent.

It also favoured raising the cap from 20 percent to 26 per cent for FM Radio.

In its recommendations to the information and broadcasting ministry, the Telecom Regulatory Authority of India (TRAI) said it had become mandatory to revise the foreign investment levels in view of the changes in the government’s overall policy on foreign direct investment, issued March 31.

The regulator, however, favoured no increase in the current 26 percent cap on overseas investments in news channels.

‘News and current affairs based content services are much more sensitive as the power of news content to influence public opinion has a bearing on maintenance of public order, security of state and maintenance of communal harmony,’ said a TRAI statement.

The level of investments in local cable operators has been pegged at 26 percent, while for state or national level cable operators who are willing to upgrade their networks to beam digital signals can have up to 74 percent of foreign equity participation.

However, there will be no restriction on foreign investment for uplinking and downlinking of TV channels other than news and current affairs TV channels.

According to a report by the Federation of Indian Chambers of Commerce and Industries (FICCI) and global consulting firm KPMG, the media and entertainment industry will grow at about 11.2 percent in 2010, after a brief blimp last year, and continue to grow at an annual rate of 13 percent over the next five years.

The total size of the industry was Rs.58,700 crore in 2009, and television is the largest sector, contributing 44 percent of the revenues in 2009. Its dominance is expected to continue increasing and reach about 48 percent of the total revenues in 2014.

‘All foreign investment less than 26 percent would be through automatic route. Investments of 26 percent and above will require prior approval of the government,’ said the TRAI statement.

India has about 500 million TV viewers and 129 million TV households and its broadcasting and distribution sector has around 500 TV channels, around 7000 Independent Cable operators, 60,000 Local Cable Operators (LCO), and 7 DTH operators.

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