“FDI increase in b’cast will help digitisation”

But speedy FIPB approval to qualified investors is needed, says MSM CEO & IBF Prez Man Jit Singh

e4m by Noor Fathima Warsia
Updated: Oct 8, 2012 8:20 PM
“FDI increase in b’cast will help digitisation”

On September 14, 2012, the Cabinet announced some good news for the Indian broadcasting industry when it said it was going to increase the FDI (Foreign Direct Investment) cap in broadcast services, specifically those that are associated with the distribution aspect of the business, to 74 per cent. While the increase in FDI also requires FIPB (Foreign Investment Promotion Board) approval up to a certain portion, the decision has standardised FDI limit across broadcast distribution services including DTH (Direct to Home), MSOs (Multi Service Operators), cable TV, HITs (Head-end in the Sky) and mobile TV. The move will strengthen DAS (Digital Accessible System) roll out in India, says Man Jit Singh, President, IBF and CEO, Multi Screen Media, in a conversation with exchange4media.

The government has recently announced an increased in FDI cap in certain areas of broadcast services including DTH, MSOs, Cable TV and also Mobile TV. Would you agree that the move is positive enough to encourage foreign investment in these areas in India?
The move to allow foreign direct investment is a very welcome step and one which will certainly be an incentive for foreign investment. 49 per cent is through the automatic route and the balance will come through FIPB approval, which introduces some uncertainty. We would have preferred it all be through the automatic route and going up to 100 per cent. Nonetheless, the Government’s action is very welcome.

What are the challenges that arise with this decision?
The only challenge is to ensure that speedy FIPB approvals are given to qualified foreign investors. It is in the country’s interest that this government policy be implemented seamlessly.

Does this move help digitisation, or would first India’s market acceptance of digitisation play a role for more investment to come in?
The influx of foreign capital will supplement funds available domestically with MSO (multi service operators) and LCO (local cable operators) to enable the required investments in set-top boxes to be made. The inflow of capital is an enabling step in the country’s roll out of digitisation.

Do you think various players would wait for the November 1 deadline to see how digitisation in India kicks off before they begin investing – the deadline hence is very critical to take this forward?
We believe that qualified investors have been looking at the Indian entertainment sector for some time and are familiar with what needs to be done. The time for investment is raw and already major investments have been made.

How does the FDI cap increase in MSOs and cable TV help? Do you think there would be players interested in these areas, especially in cable TV?
Foreign investments can help consolidate and professionalise the sector. Strategic foreign investors bring a wealth of knowledge about service, standards, back office processing and the like. While the investments will be large, an opportunity exists to make a significant return for long term investors, and this applies to all sectors of the industry.

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