The Telecom Regulatory Authority of India?s recommendations for an FDI hike in various carriage and content services of broadcasting sectors differ significantly from the stance of the ministry of information and broadcasting (I & B) .
Striking a discordant note with the ministry on the FDI limits in the cable operators sector, news and current affairs channels and FM radio, Trai has reasserted that the cap be raised in cable TV networks to 74 % against the current 49 %. The regulatory body has also called for raising the FDI limit in the news and current affairs channel to 49 % from the existing 26 % and in FM radio to 49 % from the existing 20 %. Trai?s recommendations run contrary to the ministry?s position on the cable network. The ministry had recently preferred to cap FDI at 49%, maintain status quo on the FDI cap in news channel at 26 % and restrict the limit to 24 % for FM radio.
For cable operators, Trai has reiterated its earlier recommendation of allowing 74 % FDI as it feels big investments need to be made if the cable infrastructure in India is to be upgraded and digitised. Trai estimates the cost of converting the existing one-way analogue cable network to a digital format to be around Rs 15,000 crore. Upgrading to a two-way (750-850 MHz broadband) digital cable network (prevalent in the developed countries) for India?s 80 million cable homes will cost Rs 64,000 crore. The ministry had approved a higher FDI (up to 74 %) in delivery platforms like the DTH and teleport following Trai?s recommendation. But, now agreeing with Trai?s stance on the cable TV network, the ministry had indicated its preference on continuing with the existing limit of 49 %.
It is so as it felt raising the cap might lead to the reins of the most important TV distribution platform passing onto foreign hands.
Trai has termed this approach overcautious citing statistics that there are about 40,000 to 60,000 last-mile cable operators and about 6,000 MSOs, which makes such a situation implausible even after consolidation takes place.
The regulatory body also feels that the domestic DTH operators, most of which are supported by large corporate entities, would provide great competition to cable operators in the future?foreign-owned or domestically held.
