The Hindu Business Line : Govt looking at 74% FDI cap in DTH sector

The Government is also reviewing the revenue share regime for the DTH operators. At present, DTH operators have to pay 10 per cent of their gross revenues as licence fee to the Government.

Our Bureau

New Delhi, Oct. 1 In a move that could cheer to telecom companies wanting to offer DTH services, the Government is exploring the option to raise the current foreign direct investment (FDI) cap from 49 per cent to 74 per cent for the Direct-To-Home segment. The move is aimed at bringing parity between the DTH and telecom sectors.

While telecom companies are allowed FDI up to 74 per cent, DTH players are allowed only 49 per cent.

This has created an anomaly in the industry wherein a telecom company such as Bharti has to operate under a regime with a lower FDI cap even if it has foreign investments of over 49 per cent.

A senior official of the Ministry of Information and Broadcasting said that the Government was discussing the option to raise the FDI limit to 74 per cent.

The Government is also reviewing the revenue share regime for the DTH operators. At present, DTH operators have to pay 10 per cent of their gross revenues as licence fee to the Government. The Ministry is now considering to allow DTH players to pay a percentage of the company’s adjusted gross revenue (AGR) instead.

This again is being done to bring the DTH policy in line with that of the telecom sector.

Telecom companies pay the revenue share on the AGR, which is the revenue earned specifically from telecom services. Gross revenue, on the other hand, includes all the other income. Telecom players, for example, earn revenues in the form of interest on bank deposit.

The Telecom Regulatory Authority of India (TRAI) had suggested that the FDI limits of certain sub-sectors of the broadcasting be brought at par with those for telecom industry.

The TRAI Chairman, Mr Nripendra Misra, speaking at the seminar organised by India television.com suggested the setting up of a national digitalisation fund to help cable operators and Multi Systems Operators digitise faster.