Investment cap on DTH may rise

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New Delhi, Mar 18: In a move that could open the floodgates of foreign investment in media distribution platforms, the information & broadcasting (I&B) ministry has proposed raising the cap in sectors like direct-to-home (DTH), satellite radio, head-end in the sky (Hits) and teleports to 74%.

These sectors currently have variable limits for FII and FDI investment. The move to create a higher composite cap is part of the government’s wider exercise aimed at bringing about uniformity in investment policy across sectors.

“The ministry is of the view that the ceiling for total foreign investment limits, inclusive of FII and FDI, both direct and indirect, can be upwardly raised to 74% in the case of infrastructure and platform services like DTH, teleport, Hits and satellite radio,” Asha Swarup, secretary, I&B ministry, said here

on Tuesday.

However, the current foreign investment ceiling for cable operations at 49% would remain unchanged. In the case of the teleport and DTH sectors, the current ceiling on foreign investment stands at 49%. For satellite radio and Hits—a satellite broadcast platform for cable operators—there was no official policy on foreign investment caps until now.

Trai, in its recommendations on broadcasting services, has suggested that foreign investment limits be reviewed to bring more consistency to rules governing different segments of the media sector.

The recommendations were made in view of the growing convergence in telecom and broadcasting. Trai had recommended to the I&B ministry that 100% foreign investment be allowed in the satellite radio sector. But the ministry has decided against this.

The ministry decided to restrict the FI cap to 74% to enable the entry of Indian companies into this relatively new sector as well as promote sub-sector competition.