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Thomas K. Thomas
Meera Mohanty

Bringing about level-playing field for segments offering similar services

New Delhi May 13 The Telecom Regulatory Authority of India has proposed that cable TV operators be allowed to increase their FDI cap from the existing 49 per cent to 74 per cent to bring them at par with the telecom sector.

TRAI told the Government that the FDI levels for the two sectors should be at par because there was a convergence of services beginning to happen.

The telecom regulator said that communication services such as Internet Protocol Television (IPTV) and broadband can be offered by cable TV operators also and, therefore, the FDI level for the two sectors has to be the same to address issues of level playing field. The TRAI move comes within a month of the Government allowing telecom firms to have foreign direct investment of up to 74 per cent.

"It is discriminatory to have non-uniform FDI cap between two types of operators who can offer the same type of service. This needs to be addressed to maintain level playing field. Upward FDI revision would also help in the upgradation of facilities of cable TV for provision of Internet services," said a senior official.

TRAI officials said that it was an inter-ministerial issue and the Department of Telecom could consult the Ministry of Information and Broadcasting in this regard.

In March 2006, while giving its recommendation on issues of convergence, TRAI had hinted at the disparity in FDI caps between the telecommunication and broadcasting sectors by saying that a complete review of the FDI policy for the entire broadcasting industry should be carried out.

This was, however, objected to by the Indian broadcasters including Zee Group.

The regulator has now told the Government that FDI caps for the cable TV segment only may be brought at par with that of telecom services.

Officials said that a large number of cable TV operators had sent in their representation asking for a hike in the FDI cap.

Mr Jagjit Singh Kohli, CEO of the Essel Groups' cable business, Wire and Wireless India Ltd said: "I think it should be brought up to 74 per cent, at par with the telecom industry. Now that telecom players are also offering IPTV services, you cannot have two different terms for the same industry."

However, Hathway, in which Rupert Murdoch's News Corp has a 26 per cent stake, believes that the industry is not organised enough.

"Aligning the FDI limit to that of telecom would be very welcome.

"But except for a few cable TV companies, the industry is not organised enough even to attract the currently allowed FDI level of 49 per cent," said Mr K. Jayaraman, MD and CEO, Hathway Cable and Datacom Private Ltd.

More Stories on : Radio/TV | Foreign Direct Investment | Regulatory Bodies & Rulings

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