The Hindu Business Line : FICCI seeks more FDI in DTH, cable biz

THE Federation of Indian Chambers of Commerce and Industry (FICCI) has asked the Government to increase the FDI (foreign direct investment) cap in direct-to-home and cable business to 74 per cent, similar to the telecom sector. The chamber has also suggested removing cross-holding restrictions for DTH ventures.

Currently the foreign investment cap for both cable and DTH business stands at 49 per cent. However the FDI cap for DTH is 20 per cent. Further, the equity holding of broadcasting and cable companies in a DTH company is restricted to 20 per cent.

Ficci has said that the current regulatory, market and technological environment is significantly different from the time DTH guidelines and the Cable Act were drafted. The convergence of technologies, presence of a regulator, huge investment requirements and the need to promote all distribution platforms to give end consumers a choice has made redundant the existence of different FDI limits for cable, DTH and telecom, and the cross-holding restriction in the DTH sector.

"With newer technologies coming into play very rapidly, it is now possible to use any of the distribution media (telecom, cable or DTH) interchangeably. With the emerging convergence, service providers traditionally in one industry are now diversifying to the other related industries in the wake of increasing competition and technological advancement in their traditional market segments, leading to an integration of the segments itself," it said.

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