Opening up the broadcast sector to more international funding and control, the government has raised the foreign investment cap for modernising cable networks, Direct to Home (DTH) and mobile television service providers to 74 per cent, thus giving the majority stake to the foreign partner.
The decision by the Cabinet Committee on Economic Affairs will not bring any changes to broadcast “content” companies such as TV news channels and FM radio channels where the foreign investment cap remains at 26 per cent. Instead, it further liberalises broadcast “carriage” services, including teleports such as DTH and those multi-system cable networks investing in addressability and digitalisation technologies, which are being mandatorily phased into the sector anyway.
This will also bring a level playing field into the sector. Until now, only 49 per cent foreign investment was allowed for cable and DTH firms, while Head-end in the Sky (HITS) firms already have a 74 per cent cap. Cable networks, which are not engaged in upgrade, as well as local cable operators, will have to remain within the old 49 per cent cap.
The relatively new technology of mobile TV has been brought within the foreign investment regulation net for the first time, with a cap also set at 74 per cent.
This investment includes not just foreign direct investment, but also investment by foreign institutional investors, NRIs and a range of international investment and trading instruments.