CASBAA applauds India’s move to increase broadcast FDI

Rebecca Hawkes ©RapidTVNews | 02-11-2011

The proposed increased allowance for foreign direct investment (FDI) in India's broadcasting industry has been welcomed as a positive step towards digitisation by the Cable and Satellite Broadcasting Association of Asia (CASBAA).
"The Indian industry needs an investment of nearly $4 billion to upgrade its present cable service industry and catch up the digitisation programme unleashed by the government for 2014," Deepak Jacob, executive vice president and general counsel, Star India, told delegates at the CASBAA conference in Hong Kong.
"For this to happen on the ground, it would require massive investments in this sector which is hardly available with domestic players. It is this reason that it [FDI] should be made 74% across the board," he added.
The Department for Industrial Policy and Promotion is preparing a Cabinet note to enable foreign companies to own up to 74% of direct to home (DTH), cable TV, and head-end in the sky (HITS) companies. The Indian Government is expected, however, to retain an FDI cap for news media at 26%.
Currently FDI is capped at 49% for India's cable TV and DTH operators, and 74% in HITS companies. The Telecommunications Regulatory Authority of India (TRAI) suggested raising the limit of overseas financing in broadcast platforms to 74%.
The increase is expected, among other benefits, to provide much needed investment in India's cable sector, which is facing a hefty bill for the government-decreed migration to digital transmission by the end of 2014. India has an estimated 116 million cable TV households, of which 83 million are currently analogue.
"We welcome the move to enhance the FDI limits that will throw open the industry to better management and funds inflow and hope that reforms in this sector will continue at a good pace. We are also happy that India has already taken a big step towards digitalisation of the cable services industry,'' said Simon Twiston Davies, chief executive, CASBAA.