NEW DELHI: Multi-system operators taking up digitisation with addressability will be permitted 74 per cent foreign direct investment as part of a move to bring about uniformity in FDI in broadcasting, Parliament was informed today.

Even as the views of different Ministries are awaited on the proposal to increase FDI in the media, Minister of State for Information and Broadcasting C M Jatua said his Ministry had worked out with the Telecom Regulatory Authority of India certain terms and conditions to take care of security related concerns.

The Department of Industrial Policy and Promotion cleared the proposal for uniform Foreign Direct Investment in broadcast carriage services providers, including cable TV and direct-to-home (DTH) around October last year.

The DIPP, which functions under the Industry Ministry, then circulated a draft cabinet note which also includes raising overseas investments limits according to suggestions given by Trai.

The note has been sent to different ministries, including Home Affairs, Information and Broadcasting, Law, Finance, and Department of Telecommunications. The note will have to be approved by these Ministries before it can be sent to the cabinet.

It is learnt that services sector received FDI worth $2.88 billion between April and August 2011.

The draft note wants the FDI limits in the broadcast carriage services providers such as cable TV, DTH, Headend-In-The-Sky (HITS), IPTV, mobile TV and teleport services to be made uniform at 74 per cent. The proposal includes 49 per cent FDI for local cable operators and 26 per cent for news and current affairs channels.

Under the proposal, there is also provision for putting 49 per cent FDI (out of the proposed 74 per cent) on automatic route. But there is no automatic route for content services like uplinking, downlinking and FM radio, Jatua said.

At present, FM radio and uplinking of news TV channels are allowed 26 per cent; cable TV, DTH and teleports are permitted 49 per cent; while it is 74 per cent in case of HITS. Uplinking of non-news and downlinking are both allowed 100 per cent FDI. For private FM radio, the FDI limit was raised from 20 per cent to 26 per cent last year.

In June 2010, Trai had made suggestions to raise FDI for broadcast carriage services like DTH to 74 per cent.

The move is expected to help the media which has been clamouring for more foreign investment, and for several foreign investors including expatriate Indians.

Source: Indiantelevision.com

The government has proposed a uniform Foreign Direct Investment cap of 74% across the digital cable TV sector.

“We are definitely looking at having a uniform FDI cap of 74% for the digital cable TV sector which at present has different caps. The cap for non-digital cable TV would continue at 49%,” Uday Kumar Varma, secretary, information and broadcasting ministry, told HT.

Explaining the rationale behind the move, Varma said: “Digitalisation would require huge investment. With raised FDI limits we are looking at greater capital flows into the sector.”

India is targeting complete digitalisation by 31 December, 2014 with the plan aiming at a transition from the prevalent analog system to a digital one is being seen as a game-changer.

Cable TV industry stakeholders had expressed apprehension over switching over to digital technologies because of the huge costs involved.

The enhanced cap would apply to the distribution and various carriage platforms like DTH, IPTV, mobile TV, HITS and cable companies.

The government ‘s proposal is now in the final process by the Department of Industrial Policy and Promotion (DIPP).

Sources said that 49% of the proposed 74% will be put under automatic route with the remaining to be routed through the Foreign Investment Promotion Board (FIPB).

At present, the current caps for FDI differ across platforms. FDI limit for mobile TV, HITS and IPTV is 74% while for cable distribution companies it is 49%.

Digitalisation, aiming at a transition from the prevalent analog system to a digital one, is being seen as a veritable game-changer. Broadcasters will increase their subscription revenues besides ushering in a regime of clearer subscription figures.

Consumers will also be able to select channels of their choice with digital broadcasts having sharper pictures, better sound quality and a much bigger number of channels.

New Delhi: With the ministry of finance giving its nod, the decks have been cleared for the implementation of a simplified, two-tier policy on foreign direct investment (FDI) cap in media.

Now, a 74% uniform cap for non-news media (carriage services) and a 26% cap for news media (content) shall apply. Also, up to 49% FDI in the carriage service providers (like multi-system operators or MSOs, DTH broadcasters, headend-in-the sky or HITS operators, and providers of mobile TV, satellite teleport and IPTV services) will be automatically allowed. But any FDI above 49% will need Foreign Investment Promotion Board’s nod. FE was the first to report this in February.

So far, the FDI caps in media range from 26% to 100% with variable caps of 49% to 74% for carriage service providers. Also, currently there are FDI caps within the permissible foreign investment norms for cable and DTH companies.

The inter-ministerial consultation process on this proposal concluded last week and now the department of industrial policy and promotion (DIPP), the nodal body for FDI caps across sectors, expected to present the matter to the Cabinet shortly, government sources told FE.

“The finance ministry supports the DIPP proposal for allowing 74% FDI in broadcast carriage services and 26% in content services,” a senior DIPP official said.

The move is aimed at getting the required funding. According to the information and broadcasting ministry, DTH, IPTV, mobile TV, HITS and teleport require substantial infrastructure augmentation. “Foreign investment needs to be encouraged to fill the investment gap for infrastructure being built up. Further, in view of convergence of technologies, broadcast carriage services need to be treated at par with the telecom sector where 74% foreign investment is permissible with the provision that foreign investment beyond 49% would require FIPB approval,” the I&B ministry is said to have told DIPP.

The move is in line with the proposed mandatory digitisation of 100-million-plus analogue cable homes in the country. According to a recent report by Media Partners Asia, digitisation will require around $6 billion worth of investment with $300 million alone required to meet the capex and other financial needs for digitisation of 3.5 million analogue cable homes in the four metros.

The hike in FDI cap will be crucial for the cash-strapped six-player DTH market, which is scouting for funds to meet respective expansion needs. Currently, the foreign investment cap for DTH is 49% but within that, FDI cannot be more than 20%. A similar cap is also applicable for MSOs and cable operators. However, there is no FDI policy for mobile TV. Now, all these platforms will attract up to 74% foreign investments.

However, for private FM radio, the DIPP has supported a 26% foreign investment cap for the third-phase expansion where news and current affairs content will be allowed. The FM-III policy envisages the setting up of 839 FM stations across 280 towns. For non-news content services like general entertainment, movies and other such genres, the foreign investment cap will remain untouched at 100% with no FIPB approval, sources said.

Source: The Financial Express

NEW DELHI: Lok Sabha today passed the second Bill to amend the Cable TV Networks (Regulation) Act 1995 that aims to replace the Ordinance promulgated in October.

Information and Broadcasting Minister Ambika Soni, while talking on the discussion on the Bill, assured the cable operators that they would not be “put out of business” contrary to fears expressed by some quarters with digitisation of cable services, and capacity building programmes would be held to apprise them with new technologies.

Soni said that an enabling provision had put in place to the effect that only Rs 200,000 to Rs 300,000 would be needed by cable operators to move to digitisation.

She said digitisation would give a true assessment of the subscriber base of the broadcasters and reduce dependence on advertisements. In turn, this may also lead to reduction in the vulgar content on television channels as there would be lesser dependence on TRPs.

Apart from improving the quality of reception, digitisation would also empower the viewers and the cable operators. It will enable cable operators to give larger number of channels to the consumers. There will be no prime band after digitisation, she said.

She said the Bill would plug revenue leakage and enable regulatory agencies to check illegal content.

Soni said that with the passing of this Bill, the Headend-in-the-sky (HITS), which had so far failed, would take off with greater investments.

She also said that there were punitive clauses against cable operators, MSOs or DTH operators who failed to show the must-carry channels, including the Lok Sabha and Rajya Sabha TV channels.

While most members supported the Bill, they cautioned the government against exploitation of the common viewer in the form of unjustifiable hikes in the cable rates and vulgar and misleading advertisements.

The Bill will now go to the Rajya Sabha for passing and then go to the President for her assent after which it becomes law.

The Bill aims to digitise the cable sector in the country by 31 December, 2014. The Government had earlier announced a timetable for complete digitisation of cable television in the four metros by 31 March, 2012, but this was put off to June 2012 in a notification issued subsequently. The target date for completely digitising cable sector in cities with population of more than one million was 30 March 2013, all urban areas by 30 September 2014, and the whole country by 31 December 2014.

This will also mean an end to the analogue era and customers of cable networks must have a digital addressable set-top-box irrespective of whether they wish to receive free-to-air or encrypted (pay) channels.

The delay for two months is because the Government had laid down in the Ordinance that promulgated earlier this month that six months notice will be given to the cable TV operators to enable them to install the necessary equipment for transmitting encrypted channels through a digital addressable system, in keeping with the deadlines set for this purpose for various states and cities.

A clause has been inserted in the Act to make a digital addressable system mandatory in the cable sector.

The amending Bill also has provisions for right of way and systemisation for registration of cable operators, inspection of cable services, compulsory transmission of certain channels, prescription of interference standards by the government and an enabling provision for the Telecom Regulatory Authority of India to lay down the basic service tier and its tariff.

After digitisation, all cable operators carry encrypted signals only through digital set top boxes in accordance with the deadlines that have been notified.

Source: Indiantelevision.com

Sudhir Agarwal, CEO , WWIL, in an interview with ET Now talks about company’s overall condition and prospect. Excerpts:

ET Now: This is a good news for the industry as a whole, FDI in DTH being raised from 49% to 74%, give us a sense of what kind of an impact this could potentially have on WWIL?

Sudhir Agarwal: It is a very good and encouraging initiative from the government to raise the current FDI limit across platforms in our industry from 49% to 74% across DTH, IPTV, MSO platforms. As you would know, government recently announced an initiative to digitise the whole country and they came out with a sunset date of December 2014 when the entire nation would be digitised and that’s a huge announcement and industry game changing announcement as far as I am concerned. This would require a substantial amount of investment as well. My belief is the current announcement of raising the FDI would encourage a lot of foreign players who till now were kind of waiting and watching before investing into India because of the very nature of the business here, the distribution business was essentially very unstructured and analogue in nature. So this announcement coupled with the announcement, which happened a couple of weeks back for digitising the country would mean a lot for this industry going forward.

ET Now: Given that your FII limit is currently quite low around 4%, will this move? Will you look at more foreign institutional participation as well?

Sudhir Agarwal: I am sure and I am confident about it. You are right, current foreign investment into our company is low but with the announcement of digitisation, not only WWIL but companies across platforms would benefit. This would help us fructify our plans going forward.

ET Now: Earlier you had been saying that you are open to the idea of a strategic sale as well and getting in a strategic investor to raise capital for your company. What is your view right now? Do you maintain that position?

Sudhir Agarwal: We are open to foreign investors having a dialogue with us. We will examine proposals based on the exact norms that government comes out with, so we will see as we come to the bridge, we will cross the bridge when we reach it.

ET Now: How much of a capital do you think you would require to completely digitise your analogue cable business?

Sudhir Agarwal: If you ask me as an industry, the investment required would be quite substantial. In the next three years, my guess is the investment could range up to US$3 billion and that’s a huge amount. So across platforms in this industry for digitisation, the requirement would be anywhere between $2.5-3 billion.

Source: The Economic Times

NEW DELHI: The information and broadcasting ministry has proposed to increase foreign direct investment limit across media platforms — in direct-to home, internet protocol TV (IPTV), multi-system operators and FM radio — to bring in consistency, according to sources.

The FDI in DTH, IPTV and MSO is likely to be raised from 49% to 74%, while the investment in FM radio will be increased from 20% to 26%. The proposal based on broadcast regulator Trai’s recommendations has been sent to the department of industrial policy and promotion (DIPP) under the ministry of commerce.

Sources said that foreign investment up to 26% was allowed through the automatic route earlier but now any FDI above 26% will be allowed after it is approved by the foreign investment promotion board (FIPB). Investment cap of general entertainment channels (100%) and news and current affairs channels (26%) will remain the same. The I&B ministry has rejected Trai’s proposal to reduce FDI in GEC and in local cable operators.

Sources in the ministry said that DTH, IPTV, Mobile TV and HITS require substantial infrastructure augmentation, which needs huge investment. There was also need for convergence of technologies in the broadcast and telecom sector where 74% foreign investment is allowed.

Source: Business Standard

Broadcast tribunal Telecom Disputes Settlement and Appellate Tribunal (TDSAT) today set aside sectoral regulator Telecom Regulatory Authority of India’s (Trais’s) attempt to cap the wholesale price of channels for DTH and IPTV service providers at 35 per cent of the rates they charge cable operators.

Earlier, broadcasters charged them half of what they got from cable operators.

Setting aside Trai’s tariff order, TDSAT has asked it to fix afresh the tariffs that broadcasters can charge from DTH and IPTV players.

“Trai should start tariff fixation after taking relevant factors into consideration afresh,” TDSAT said. The tribunal also directed Trai to undertake detailed study for the purpose.

On July 21, Trai notified that a new wholesale tariff structure would be effective from September 1, whereby broadcasters can charge only 35 per cent of the rates they charged from normal cable operators, while supplying to service providers on platforms such as DTH, IPTV and HITS.

On August 23, leading broadcasters, including Zee Turner, Viacom 18 Media, Sun TV and Star Den Media Services, had moved TDSAT challenging Trai’s tariff order to cap wholesale price of channels to service providers like DTH and IPTV. In separate petitions filed with TDSAT, ESPN Software India, MSM Discovery, Zee Turner and STAR Den Media Services said the Trai tariff was not commercially viable.

The broadcasters had submitted that while fixing the tariff, Trai had acted in an arbitrary and unreasonable manner and did not consider the suggestions of the stakeholders.

Broadcasters offer cheaper rates to operators like DTH and IPTV as they can ascertain the number of subscribers of these players, which is not the case with cable services where under-reporting is believed to be very high.

Source: Business Standard

NEW DELHI: The Information & Broadcasting Ministry would like to take forward the recommendation of the Telecom Regulatory Authority of India (Trai) to up foreign direct investment in direct-to-home to 74 per cent but there are processes involved before this can be done, said I&B secretary Raghu Menon.

Menon said DTH had taken television to the remotest corners of the country and so the government would like to encourage the sector.

On another issue, he said Trai had recommended a complete switch-off of analogue by 2013, but that was a complex issue and may not be easy to implement. He said the sunset date will have to be extended.

However, he said Prasar Bharati was working on achieving full digitisation by 2017 and was working on the first phase to be completed by 2013 at a cost of Rs 15.62 billion.

Addressing the one-day meet on ‘Addressable India’ organised by the Cable and Satellite Broadcasters Association of Asia (CASBAA), he said digitisation had been given a boost by the DTH and Cas (conditional access system).

The I&B Ministry was also helping Prasar Bharati increase the capacity of channels on DD Direct Plus, the country’s only free-to-air DTH, to 97 in the first phase and finally to 200 by mid-2012.

Referring to the growth of high definition TV and 3G on mobiles making access of TV content easier, he said a three-member committee on use of mobiles for TV had already given its report which was under study.

He said the growth of the broadcasting sector in India had been one of the highlights as even the recession did not stop this growth pattern with leaders thinking out of the box. It was set to emerge as a flag-bearer of India on the global scenario.

He said that reports had indicated a 13 per cent CAGR for television by 2013. It had achieved a target of 8.5 per cent by 2009 and had become a Rs 265 billion strong industry.

The country now had just under 600 TV channels with 65 foreign channels, he said.

The Ministry would facilitate this growth and was therefore liberalising this process. Digitisation had transformed everything, leading to a paradigm shift. The TV screen may soon be a thing of the past with computer screens taking over.

Digitisation had begun with DTH, then Cas, followed by HITS (Headend-In-The-Sky) and IPTV, enabling content providers and giving greater choices to consumers. DTH cannot replace cable but will force that sector to digitise.

Though the Trai tariff order was under challenge in courts, it was expected to improve things when implemented. Tariff and inter-connection issues also have to be worked out for HITS.

But he noted that since HITS was voluntary, the pace of digitisation will be slow unless a timeline is set. However, timelines are not easy to achieve in a vast country like India and migration may be difficult. This may not be possible unless there are affordable set top boxes, greater mobilisation and investments.

Earlier, Trai chairman J S Sarma referring to the National Broadband Plan and the consultation paper submitted by the Authority in this regard yesterday, said TV was a good medium for spreading broadband, and stressed on the need to lay a network of optical fibre and suggested the setting up of a National Optical Fibre Agency (NOFA).

He said TRAI had also recommended setting up a National Broadband Network to help the government achieve its goal of 20 million broadband connections all over the country.

He said in order to go fully digital, the recommendations of Trai dated 5 August 2010 on “Implementation of Digital addressable system in India” will need to be implemented on priority basis.

The Government may review the duties levied on inputs and finished products used in providing broadband and Internet services. Customer premises equipment including modem and routers used for Internet and broadband may be considered for 100 per cent depreciation in the first year, he said.

Introducing the meet, Casbaa India head Anjan Mitra said the DTH sector was steering towards an aggressive acquisition mode with Indian DTH subscribers reaching a record high of 1.7 million in November. Between March and November 2010, the DTH sector had matched its last fiscal customer pile up by acquiring a total of 8.5 million subscribers in just eight months.

Tam Media Research CEO LV Krishnan said that while the analogue industry had grown by 11 million in the last four years, the digital industry through DTH and other means had grown by 29 million. Cable and satellite had seen a growth of 16 per cent last year and 13 per cent this year.

The terrestrial viewing had shrunk from 30 to 26 million homes and it was interesting that DTH had seen a greater growth in the rural areas than in urban areas in the initial years. The rural sector was also moving towards pay TV and while 86 per cent subscribers in urban areas were on pay, the rural area subscribers had doubled to 64 per cent in recent years.

Referring to viewing patterns, he said the choice of channels was clearer among young audiences; there were more points of consumption and even repeat content, and there were higher conversions to digitisation. Digital TV was expected to go up to 38 million homes soon.

Source: Indiantelevision.com

MUMBAI: Wire and Wireless (India) Ltd is targeting a revenue of Rs 3.4 billion and expects to be Ebitda positive for the full-fiscal, a source close to the company said.

Fuelling this over 20 growth will be the MSO’s entry into new markets, a projected rise in carriage revenue and growth in subscription income.

WWIL is setting up a joint venture company, Siti Vision, with a group of people who have strong ground control to revive its presence in Hyderabad. “WWIL will hold 51 per cent stake. The content has been tied up with the broadcasters and the cable TV service will launch in September. The JV will also expand operations into other parts of Andhra Pradesh,” the source said.

The company has also firmed up plans to invest Rs 200 million towards acquisition this fiscal and is conducting due diligence on five cable networks. “The investment on acquisition could climb if good opportunities throw up,” the source added.

Carriage income is expected to make up 57 per cent of WWIL’s total revenue in FY’11. The MSO has a presence in 54 cities across the country and is eyeing acquisitions in the Tam markets (which influence TV ratings and fetch high carriage fees).

WWIL has eight digital head-ends and is planning to add more during the fiscal. It has stopped its Headend-In-The-Sky (HITS) operations after taking a loss of Rs 1 billion. Zee Group chairman Subhash Chandra told shareholders at the AGM that launching HITS was a mistake as the regulatory system was not in place and “it was a launch ahead of its time.”

WWIL has reduced its debt from around Rs 3.50 billion in FY’10 to Rs 3 billion.

For the three months ended June, WWIL posted an operating consolidated revenue of Rs 692.46 million, up from Rs 630.06 million in the year-ago period, and turned Ebitda positive with the operating profit standing at Rs 74 million from a Rs 10 million loss in the first quarter of FY’10.

Source: Indiantelevision.com

NEW DELHI: Joining other broadcasters, Viacom 18 Media and Sun TV on Wednesday approached sectoral tribunal TDSAT, challenging TRAI’s tariff order to cap wholesale price of channels for DTH and IPTV service providers at 35 per cent of the rates they charge cable operators.

Currently, the broadcasters charge DTH and IPTV player 50 per cent of what they charge cable operators.

In two separate appeals filed before Telecom Disputes Settlement and Appellate Tribunal (TDSAT), Viacom 18 Media and Sun TV Network said that tariff suggested by the broadcast regulator was not commercially viable for them.

The broadcasters submitted that while fixing the tariff, TRAI has acted in arbitrary and unreasonable manner and did not consider the suggestions of the stakeholders.

Their appeals were clubbed with the petitions of four other leading broadcasters – ESPN Software India, MSM Discovery, Zee Turner and Star Den Media Services – which had approached TDSAT on August 23 challenging TRAI’s direction.

All petitions would be jointly heard by the tribunal on September 14.

The TDSAT had directed the Telecom Regulatory Authority of India (TRAI) to file its reply by September 6.

TRAI notified on July 21 that a new wholesale tariff structure would be effective from September 1, whereby broadcasters will charge only 35 per cent of the rates that they charge cable operators while supplying to service providers using different digital platforms such as DTH, IPTV and HITS.

Broadcasters offer cheaper rates to operators like DTH and IPTV as they can ascertain the number of subscribers of these players, which is not the case with cable services where under-reporting is believed to be very high.

On August 23, TRAI had informed TDSAT that the new tariff would be effectively operational from October 1, 2010, and not from September 1, as notified in the circular.

Source: The Economic Times