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TRAI moots 74 per cent FDI cap on satellite radio

20-May-2008
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TRAI moots 74 per cent FDI cap on satellite radio

The Telecom Regulatory Authority of India (TRAI) has initiated a consultation process on draft satellite radio policy as proposed by the I&B Ministry. TRAI has prepared guidelines on satellite radio operations that will limit foreign direct investment (FDI) to 74 per cent and introduce licence requirements for transmission and content.

Currently, WorldSpace is the sole satellite radio service provider in the country, but it has been operating without a licence in the absence of guidelines for the sector.

The draft policy guidelines make a distinction between provision of satellite radio service (that is, carriage of radio channels) and provision of content (radio channels) to such satellite radio service providers. Accordingly, two types of licences are envisaged in the draft satellite radio policy. One type of licence is for providing the satellite radio service for carriage and broadcasting of channels, and the other licence entitles the licensee to get registration for satellite radio channels, which he will in turn provide to satellite radio service operator for broadcasting. The draft satellite radio policy guidelines permit a satellite radio service provider to hold the license for registration of satellite radio channels also.

Some of the major issues covered in the draft policy guidelines are eligibility criteria, period of licence, entry fee and annual licence fee, bank guarantee, basic conditions and obligations, technical standards, monitoring, inspection, value added services, terrestrial repeaters, termination of license, WPC wing’s license, procedure for application, disputes and jurisdiction.

The TRAI recommendations will impact the radio business of WorldSpace, requiring it to reduce its foreign equity from 100 per cent to 74 per cent and discontinue broadcasting private news channel stations in India other than paying the entry fee and sharing revenue with the Government.

AROI General Secretary Uday Chawla said, “The investment in satellite should be at par with FM. Since TRAI has already recommended 49 per cent for FM, the same limit should apply to satellite radio also.”

The licence conditions will also prohibit radio companies from selling commercial airtime to advertisers. Service providers will also need to register every channel they air. News content will be permitted only from Doordarshan and All India Radio.

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