Media, telecom firms divided on FDI hike proposal

Media and telecom companies are divided in their views on the issue of raising the foreign direct investment (FDI) limit in cable television, direct-to-home (DTH), Headend In the Sky (HITS), teleport, mobile TV and internet protocol TV (IPTV) as suggested by the Telecom Regulatory Authority of India (Trai), the broadcast regulator, in its recent consultation paper.

Citing national security as the prime reason for not increasing the FDI limit in the media sector, companies such as Zee Network, Reliance ADAG-owned Big TV, Times Global Broadcasting (Times Now) have opposed the regulator's proposal of across-the-board increase in the FDI limit across cable (49 per cent), DTH (49 per cent), HITS (no existing limit) and satellite radio (no existing limit) to 74 per cent, as allowed in the telecom sector.

Bharti Airtel, IndusInd Media, Ortel Communications, among others, have supported an increase of the FDI cap in both cable TV and DTH to 74 per cent, saying these segments would benefit from convergence in technologies.

Opposing an FDI hike in cable services "" DTH, IPTV, mobile TV, among others "" Zee Network said that it need not be revised to 74 per cent as proposed by Trai, but be retained at 49 per cent in all media-related services.

Big TV, Reliance ADAG's upcoming DTH venture, in its response to Trai, suggested a need to look into all the regulatory aspects in totality and not just foreign investments. "No useful purpose will be served by rationalising FDI alone."

However, telecom major Bharti Airtel, which is also set to launch its DTH venture soon, supported an increase in FDI cap, specially for DTH, IPTV and HITS platforms.

"The FDI limits in the broadcasting sector should be revised and brought in conformity with the existing limits in the telecom sector to support growing convergence of technologies," the company said.

IndusInd Media, a leading multi-system operator, also advocated the principle of convergence for foreign investment limits in all broadcasting platforms and suggested raising the FDI limit of cable services to 74 per cent, as proposed by Trai for DTH and HITS platform.