Space Tv Breaks Dth Jinx, Seeks Licence, Lists Riders

Space Television has become the first company to apply to the government for a licence to operate a Ku band direct-to-home (DTH) television venture.

The Rupert Murdoch-controlled Star India, which runs the Star bouquet of channels is said to be interested in picking up a stake in Space Television.

A senior government official said, "We have received an application for a DTH licence from the company a few days ago."

A typical DTH platform with about 100 channels will require investments in the region of $500 million. Though the official did not divulge the details, sources said the application from Space Television came with certain conditions.

According to sources, Space Television said 10 per cent annual revenue sharing with the government would make the DTH venture commercially unviable. Besides, it has also asked for lowering of duties on the import of set-top boxes needed to access a DTH service. Sources said Star would have to restrict its shareholding in Space Television to 20 per cent, in accordance with the policy guidelines on DTH. The total foreign investment "" including foreign direct investment, and investment by Non-Resident Indians, overseas corporate bodies and foreign institutional investors "" should not exceed 49 per cent. Also, a broadcasting or a cable company cannot hold more than a 20 per cent stake in a DTH venture.

In November 2000, the Cabinet had given a formal nod to the reception of  Ku band television signals direct to Indian homes. Various restrictions were put as a safeguard against the creation of monopoly and cultural invasion.

A DTH company will have to pay an entry fee of Rs 10 crore at the time of applying for a licence, along with a bank guarantee of Rs 40 crore for the licence-period of 10 years.

However, there were no applications prior to this. This created concern in certain sections of the government about DTH policy guidelines. The Planning Commission's 10th working group on the information and broadcasting ministry said: "The policy on DTH has not encouraged any player to come so far and promote the growth of digital set-top boxes. This needs to be reviewed. The policies to treat DTH services as the source of revenue are counter-productive. They limit the growth of the market and defeat the very objective of reaching out to consumers."