The information and broadcasting ministry endorsed the recommendation by the Telecom Regulatory Authority of India (Trai) to enhance foreign direct investment (FDI) ceiling for direct to home TV, Internet protocol TV and teleport from 49% to 74%.
However, it rejected recommendation to reduce the FDI ceiling for local cable operators from 49% to 26%, arguing that the limit had been 49% since 1995. “The nature of control as per the provisions of the Company Law would also not undergo any change since the power to initiate a special resolution remains the same at 26% or at 49%. The ministry is of the view that not much purpose would be served by reducing the FDI limit and, therefore, 49% FDI may be retained for the LCOs,” the ministry said in its draft note, which has now been sent back to Trai for consideration.
On the recommendations on FDI cap for uplinking of nonnews and current affairs TV channels and downlinking of TV channels uplinked from abroad and in news channels and FM, radio, the I&B ministry agreed with views of Trai under those heads.
There is no restriction on foreign ownership of non-news and current affairs TV channels and downlinking TV channels uplinked from foreign countries. The Trai had favoured status-quo.
There is a cap of 26% on FDI flow in news and current affairs TV channels and FM radio, and Trai wanted the limit to remain untouched.
The major change that could be in the offing is in the services offered by the various carriage services. While platforms such as HITS and mobile TV are allowed to invite FDI up to 74%, a parity is now being sought to be restored by allowing DTH, Teleport and IPTV operators also to attract the same level of foreign investment. “The ministry may broadly agree with the recommendations that a limit of 74% for foreign investment for the broadcast carriage services such as DTH, IPTV, Mobile TV, HITS and Teleport may be set. This will bring uniformity in the FDI ceiling in carriage services. The rationale brought out by Trai for reaching the 74% limit is justified in view of the burgeoning growth of the sector, which requires huge investment and also in view of the convergences of technologies,” the note said.
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