India: Question mark on vertical integration

India’s regulator has cast a new shadow over the country’s growing pay-TV sector, recommending that broadcasters or their parent companies not be allowed more than 20% of a distribution platform. But companies would have three years to divest.

If adopted, the move could force Zee TV’s parent company, Essel Group, to sell either its broadcasting interests, Zee Entertainment Enterprises, or its distribution interests, which include Dish TV.

Other broadcasters may not be immune, including south Indian Sun Network, which owns Sun Direct as well as numerous channels, Star TV which owns 22% in cable MSO Hathway Cable, and Reliance Communications which is planning to launch channels as well as its Big TV platform.

But the proposals are just that – proposals – and are likely to be a long way yet from being adopted by the government.