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Govt. may reconsider sectoral cap on DTH

09-March-2001
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Govt. may reconsider sectoral cap on DTH

The government is taking a fresh look at the 20 per cent sectoral cap on broadcasters for Direct-to-Home broadcasting. The I&B ministry has asked home minister L K Advani, who heads the group of ministers (GoM), to take a view on the contentious issue.

The broadcasters have lobbied with the government for raising the bar on sectoral cap from 20 per cent to 49 per cent. As per current government guidelines, the total foreign investment in the broadcasting sector shall not be more than 49 per cent in which share of FDI will not exceed 20 per cent. Further, no broadcasting or cable network company would be eligible to own more than 20 per cent of the total equity, the guidelines stated.

The guidelines issued by the government stipulated a revenue sharing arrangement of 10 per cent as annual fee for the licence period of ten years. The broadcasters had earlier asked for a five-year moratorium on revenue sharing. The latest move to refer the sectoral cap issue to GoM follows strong objections raised by the broadcasting industry.

It may be noted that the GoM, while giving go-ahead to DTH TV service in the country had warned against vertical integration and monopoly between DTH operators and TV channels.

The government was slated to come out with detailed guidelines on DTH last week. Until now, several leading broadcasters including Zee Telefilms, Star India, Sony and Jain TV have expressed interest in setting up DTH platforms.

The Prasar Bharati is also actively examining a foray into DTH along with one of the state telecom majors, VSNL and MTNL. Many industry watchers also felt that with the proposed Convergence legislation expected to come into effect towards the year-end, the super regulator, Convergence Commission of India, should take a call on the whole issue.

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