Trai for 100% foreign funds in broadcasting

Consultation paper aims at recommending a comprehensive policy on foreign investments.

The Telecom Regulatory Authority of India (Trai) has sought comments on raising the foreign investment limit in the broadcasting sector to 100 per cent to permit the Indian subsidiaries of foreign companies to provide broadcasting services.

Floating a discussion paper on the matter, Trai has said that the 100 per cent foreign investment limit for such broadcasting companies should come with appropriate monitoring and content regulation.

The move has come in response to the industry's demand.

Trai's paper is aimed at recommending a comprehensive policy on foreign investment in the broadcasting sector at the behest of the Ministry of Information and Broadcasting (I&B).

The paper has also sought comments on whether the investments should come via the automatic route or if there should be a sub-limit beyond which the Foreign Investment Promotion Board (FIPB) approval would be needed.

Trai also wants to know if it will be reasonable to classify different segments of the broadcasting sector in terms of carriage services (cable services, Headend In The Sky, DTH, teleport) and content services (private FM radio, television broadcasting) for laying down foreign investment limits (foreign direct investment, foreign institutional investment and composite foreign investment).

The paper has proposed an across-the-board hike in foreign investment caps. For DTH, HITS, satellite radio and teleport segment, Trai has already proposed a hike in the foreign investment cap from 49 per cent to 74 per cent in DTH and teleport. Since there are no existing limits for HITS and satellite radio, Trai has proposed a 74 per foreign investment cap.

For the FM radio sector, Trai has already recommended a 26 per cent FDI cap (from 20 per cent) for the companies that want to broadcast news and a 49 per cent FDI cap for the companies that do not wish to broadcast news.

But the I&B ministry has clarified that it will not be able to increase the FDI cap in the FM radio sector to 26 per cent. It is, however, ready to hike the FDI cap from 20 per cent to 24 per cent.

Significantly, going by the ministry's view on the cable sector, Trai has not proposed increasing the foreign investment limit for the cable sector, where the FDI limit is 49 per cent.

The ministry has noted that even with the 49 per cent FDI limit, the cable companies have not managed to attract significant foreign investment.

It feels since cable distribution networks run across the country, a further hike in the FDI cap may allow foreign companies to take management control of local cable companies.

The last date for filing the comment is March 28.