Telecom Regulatory Authority of India's (TRAI) recommendation to increase foreign direct investment (FDI) limit from 49 per cent to 74 per cent for direct-to-home TV, Internet Protocol TV and Teleport has been validated by the Information & Broadcasting Ministry.
"The ministry may broadly agree with the recommendations that a limit of 74 per cent for foreign investment for the broadcast carriage services such as DTH, IPTV, Mobile TV, HITS and Teleport may be set. This will bring uniformity in the FDI ceiling in carriage services. The rationale brought out by TRAI for reaching the 74 per cent limit is justified in view of the burgeoning growth of the sector, which requires huge investment, and also in view of the convergences of technologies," said the ministry in a draft note that has been sent to TRAI for consideration, according to a report in The Economic Times.
This change will bring uniformity between different platforms, since HITS and mobile TV are already allowed to get FDI up to 74 per cent. However, the FDI ceiling for local cable operators will remain 49 per cent (it has been so from 1995) as the recommendation to reduce it to 26 per cent by TRAI has been rejected by the I&B Ministry.
"The nature of control as per the provisions of the Company Law would also not undergo any change since the power to initiate a special resolution remains the same at 26 per cent or at 49 per cent. The ministry is of the view that not much purpose will be served by reducing the FDI limit and, therefore, the ceiling of 49 per cent FDI may be retained for the LCOs," the note said.
The I&B Ministry and TRAI reached equal grounds on the recommendations on FDI limit for uplinking of non-news and current affairs TV channels and downlinking of TV channels uplinked from abroad and in news channels and FM radio.
The 26 per cent limit on FDI flow in news and current affairs TV channels and FM radio is still the same as neither party wanted changes in it. But there is no ceiling when it comes to downlinking the TV channels, uplinked from foreign countries, and non-news and current affairs TV channels being owned by foreigners.