India examines foreign invesment limits

chris

Another day, another consultation from India’s media regulator.
This time, regulator TRAI (Telecoms Regulatory Authority of India) wants industry and pubic opinion on foreign investment (FI) limits for the broadcasting sector. And TRAI has hinted that there could be a change in the structure of regulation, with the classification of companies into “carriage services” and “content services”.

A statement from TRAI said: “In view of the divergence in FI limits for different segments, the need to undertake a review of the FI policy for the broadcasting sector has been highlighted time and again by the Authority through its recommendations. This is necessary for consistency in policy and a level playing field among competing technologies in view of convergence of broadcasting and communications technologies.”

Limits are currently are not uniform across the media sector, with different limits for different segments. For instance, a cable network operator’s foreign investment cap is 49%, as is a DTH operator’s, although there is a 20% limit on foreign direct investment in a DTH operator which is not there for a cable operator. News broadcasters are allowed just 26% foreign investment, while there is no limit for non-news broadcasters.

Only some limits are proposed by the government to rise, however. DTH operators would be allowed 74%, although there would be no change for cable operators. Teleport (hub) operators limit would also rise from 49% to 74%, but news channels would stay the same.

TRAI is also hoping to stimulate investment in the sector, noting that two years in which policy decisions relating to changes in foreign investment limits were taken corresponded with peaks in foreign investment inflows to the media industry, including print media. These were 2002/03 (foreign invesment of US$37 million) and 2005/06 ($56 million), compared with $14 million in 2003/04, $10 million in 2004/05 and $44 million in 2006/07.

One of the issues on which the regulator is seeking comment from stakeholders is whether it would be more reasonable to undertake a “classification of different segments of broadcasting sector into carriage services and content services for the purposes of laying down foreign investment limits.” That, said the regulator, would enable liberal foreign investment limits for one category and more conservative limits for another.

Another issue is whether there is a need for alignment of FI limits in broadcasting with those in the telecoms sector, particularly in light of recent IPTV and mobile TV launches.

Those wishing to respond should do so by March 28. Full text of the consultation paper is available on TRAI’s website

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