MSOs for higher FDI in cable TV sector

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New Delhi: With the information and broadcasting ministry (I&B) deciding to hike the foreign direct investment (FDI) limit in the DTH sector to 74% from the existing 49%, the multi system operators (MSOs) have also sought a similar hike.

In a letter to the Prime Minister’s Office, the MSOs have said that if the DTH sector is open to higher limits of foreign investment, the cable sector must also be permitted to raise the FDI ceiling to 74% from the existing 49%. While the DTH sector caters to about eight million subscribers, the cable sector, constituting of MSOs and local cable operators (LCOs), reaches 78 million homes.

Commenting on I&B ministry’s consideration over imposition of a differential FDI cap within the cable networks for MSOs and LCOs, a MSO alliance member said, “We have not received any assurance of that nature from the ministry”. The ministry is considering a proposal to increase the FDI limit for the MSOs in order to align it with the proposal to raise FDI cap for other distribution medium like DTH, HITS, mobile TV, while the FDI ceiling for LCO is most likely to remain unchanged at 49%, according to a ministry official.

This revised stance is different from the ministry’s earlier one which had favoured a hike in the FDI cap across content distribution platforms with the exception of cable sector. It was 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 case of infrastructure and platform services like DTH, mobile TV, HITS and satellite radio. The cable sector was excluded on the pretext that raising the limit might result in the management control passing from Indian hands to foreign investors. Since cable TV still remains the predominant mode of distribution of broadcast channels in India penetrating into 78 million households, government considered this matter sensitive. The ministry also felt that the sector has not been attracting even the 49% of FDI limit prescribed so far.