Rupert Murdoch’s dream project—direct-to-home (DTH) broadcasting—will have to deal with the new government set-up now. The Tata-STAR combine’s DTH application is yet to get an approval from the home ministry. According to sources in the government, top officials responsible for the venture are sitting up over the delay in getting the clearances. The Tata group holds 80 per cent, while STAR has 20 per cent in the venture. This project is estimated at Rs 1,600 crore.
The Tata-STAR DTH application was submitted to the government more than two months ago. The Space TV application, submitted by Star last year, was rejected by the government for non-compliance in several areas.
Subsequently, STAR entered into a partnership with Tata Sons and made a new application for DTH. Although the information and broadcasting (I&B) ministry has found the Tata-STAR application “in order”, the home ministry has not given its nod yet.
With the Congress-led government coming to power, Mr S Jaipal Reddy is among various names doing the rounds for taking charge of the I&B ministry. It may be recalled that in 1997, when Mr Reddy was the I&B minister, DTH was bann-ed, spoiling STAR’s mega plans on direct-to-home.
Through a notification issued in 1997, government had banned the installation and maintenance of DTH TV service by any person in the country to ensure regulation of the nature and content of programmes and prevent undesirable and objectionable broadcasts. Then, under the NDA rule, the ban on DTH was lifted, more than two years ago.
STAR group CEO Michelle Guthrie was in the capital a month back to discuss the DTH project with officials in the I&B ministry. The Tata-STAR service would be modelled on UK’s BSkyB.
As per government guidelines on DTH, the FDI limit in a venture is 20 per cent and total foreign investment permitted is 49 per cent. There’s a sectoral cap of 20 per cent as well for broadcasters. The guidelines also mention that the applicant company must have Indian management control and that the CEO of the company should be a resident Indian citizen.
Subhash Chandra-promoted ASC Enterprises was the first player to launch a DTH platform in the country. Public broadcaster Prasar Bharati is also expected to launch its Ku band venture (similar to DTH, but in free-to-air mode) shortly.
In DTH, consumers can directly access TV channels, Internet and other multi-media services, by putting out a small dish antenna. Also, DTH enables you to bypass the cable operator.