FDI cap in DTH may rise to 74% in India

NEW DELHI:

The government will soon raise the foreign direct investment (FDI) cap to 74% in cable and direct-to-home (DTH) modes of distributing telecast signals. The current policy permits 49% foreign holding in cable TV and DTH. The Cabinet is expected to take up the matter of raising the FDI cap soon. At present, there is a wide variation in FDI caps across different sub-sectors in telecommunications and broadcasting — the current policy permits 49% foreign holding in cable TV, 100% in satellite radio, 49% in DTH, of which direct foreign investment can only be 20% — with the rest having to be through FII investment. The current policy also does not specify the FDI limit for head-end in the sky (HITS). HITS is a method of satellite-based distribution of encrypted signals to cable operators who would unscramble the signals and carry them to consumer homes. In DTH, the satellite distributes the signals directly to consumer homes. The inconsistency in the policy is best illustrated by this example: Delivery of television signals through satellite-based technology (DTH) has an FDI cap of 20%, but distribution of the same content attracts an FDI cap of 49% when through cable and 74% if offered by an internet service provider or telco on the IPTV platform.