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TRAI moots 74 per cent FDI limit for mobile television service providers

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TRAI moots 74 per cent FDI limit for mobile television service providers

The Telecom Regulatory Authority of India (TRAI) has released its draft recommendations on issues relating to mobile television service to the Ministry of Information & Broadcasting. Among other recommendations, TRAI has suggested that FDI limit for mobile television service providers should be 74 per cent.

The Ministry had sought the Authority’s recommendations vide its letter dated June 21, 2007 on various issues relating to proposed licensing policy for mobile television service. The Authority had issued a consultation paper on these issues on September 18, 2007. This was followed up with an Open House Discussion in Delhi on October 26, 2007. The draft recommendations were released on January 3 for a second round of consultation as the subject matter of recommendations was new and the technologies for mobile television were still in an evolutionary phase.

The two routes for providing mobile television services are the telecom network with spectrum already allotted, and the broadcasting method. TRAI is of the view that telecom operators having CMTS license or UASL license will not require any further license or permission for offering mobile television services on their own network using spectrum already allotted to them. Two separate types of licenses for the two transmission routes should be offered.

According to the draft recommendations, the choice of technology should be left to the service provider with the condition that the technology to be deployed for providing mobile television should be based on standards issued by International Telecommunication Union (ITU), Telecom Engineering Centre of India (TEC) or any other international standards organisation or any other standardisation organisation specified by the Government of India.

TRAI also recommended that sharing of terrestrial transmission infrastructure of Doordarshan should be permitted on mutual agreement basis in a non-discriminatory manner. Wherever a mobile television service provider had installed its own infrastructure, it must be shared with other such service providers. It also recommended that the licenses for mobile television services for terrestrial systems and satellite-based systems should be granted through a closed tender system on the basis of one-time entry fees (OTEF) quoted by the bidders.

According to TRAI, minimum net worth requirements of Rs 40 crore for satellite-based mobile television licenses and Rs 3 crore for each service area in terrestrial mobile television licenses should be laid down for being eligible to participate in the licensing process. A state should be the license area for a mobile television terrestrial service license. The regulatory body also added that some of the smaller states could be combined to form an appropriate license area in order to enable financially and operationally viable model. For satellite-based systems, the license area for mobile television service license should be the entire country.

The tenure recommended for both types of mobile television licenses should be for 10 years, while the licensee fee should be charged at the rate of six per cent of gross revenue for each year or at the rate of 10 per cent of the reserve one time entry fee limit for the concerned license area, whichever is higher.

According to the draft recommendation, one year is a sufficient and reasonable time for rolling out of services by a licensee in case of satellite-based transmission route, and that any mobile television licensee should not allow any broadcasting company or group of broadcasting companies to collectively hold or own more than 20 per cent of the total paid up equity in its company at any time during the license period. Simultaneously, the mobile television licensee should not hold or own more than 20 per cent equity share in a broadcasting company.

TRAI has invited all stakeholders to give their comments on the draft recommendations by January 10, 2008. The comments received will be posted on TRAI’s website.


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