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Trai may favour 74% FDI in cable, DTH

12-June-2004
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Trai may favour 74% FDI in cable, DTH

Telecom Regulatory Authority of India (Trai) may recommend hiking the foreign investment limit in cable networks and direct-to-home (DTH) broadcasting to 74 per cent, according to industry sources.

Representatives of TV channels met Trai officials on Friday to discuss various issues related to the conditional access system (CAS). During the meeting, there were indications that Trai was in favour of higher level of foreign investment in the sector. At present, the foreign investment limit in cable networks is 49 per cent and that in DTH broadcasting only 20 per cent.

When contacted, Trai chairman Pradip Baijal told FE that “it is the prerogative of the government to take decisions on foreign investment.” Trai can only offer recommendations on policy issues, he said. “FDI involves political and economic considerations,” he added.

But, FDI in the broadcasting sector was part of the Trai consultation paper on CAS. And, according to Mr Baijal, Trai is likely to incorporate the views of the industry stakeholders on FDI, when it submits its final recommendations on CAS to the government. On whether Trai was in favour of a higher FDI limit for cable and DTH, Mr Baijal replied: “We have not made up our mind.” The final Trai recommendations on CAS would be issued early July, Mr Baijal said.

More specifically on the conditional access system issue, Trai is tilted towards recommending a “mandatory” CAS, said a broadcaster, who attended the Friday meeting. However, some broadcasters, including STAR, wanted a “voluntary’ CAS, sources said. Other issues discussed in the meeting included must-carry channels, pricing of channels, regulating advertisements, and competition between broadcasters.

Incidentally, Hong Kong-based research firm, Media Partners Asia, which was commissioned to conduct a study by Trai, favoured introduction of mandatory CAS, but in a selective way. However, at that point, Mr Baijal had said that the Media Partners report had discussed “both options”, calling CAS a complex issue.

Trai was given the additional responsibility of the broadcasting sector a few months ago.

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