The Union Cabinet on Wednesday approved 100% Foreign Direct Investment (FDI) in direct-to-home (DTH) service, extension of the license period from 10 years to 20 and a reduced licence fee.
At a press conference, Minister for Information and Broadcasting Prakash Javadekar said, “The Commerce Ministry had already spoken of 100% FDI in the DTH sector, but because of the guidelines issued by the Information and Broadcasting [I&B] Ministry, the FDI was limited to 49%. We have corrected that aberration today.”
The licence fee had been reduced in keeping with the rates in the telecom sector, he stated.
A statement from the I&B Ministry said the proposed reduction was intended to align the licence fee regime applicable to the telecom sector and would be prospectively applied.
“The difference may also enable DTH service providers to invest for more coverage, leading to increased operations and higher growth and thereby enhanced and regular payment of License Fee by them,” the statement said.
Currently, India has 18 crore television sets, out of which 6 crore operate on DTH. The I&B Ministry claimed that the revised guidelines would help in fair degree of stability and bring in new investments. Since the DTH sector was a highly employment intensive sector, these changes would increase employment opportunities, it added.