Economy

Govt may raise FDI cap for cable operators

Shishir Sinha Meenakshi Verma Ambwani New Delhi | Updated on November 15, 2017

BL27_P4_STB_AND_DTH_SALE

Will help the industry raise capital for digitisation

The Government may allow only digital cable operators to increase their foreign direct investment limits. The Cabinet Committee on Economic Affairs (CCEA) is expected to take up the proposal of increasing the FDI limit from 49 per cent to 74 per cent for cable companies as well as Direct to Home (DTH) players soon.

Only those cable television operators and multi-system operators who switch from providing analogue to digital signals may be allowed to induct higher amount of foreign direct investment. This condition is learnt to have been added in the revised draft for increasing FDI in cable company as well DTH service providers.

With the Information and Broadcasting Ministry replying to most of the concerns raised by the Home Ministry, chances of the proposal getting the final nod have brightened.

A person familiar with the development told Business Line, “After the Home Ministry's issue, efforts are on to make this proposal in tune with the latest digitisation initiatives. That is why the condition of digitisation may be added especially for cable networks.” Such a condition, if included, will also help give a clearer cost and revenues estimates to the potential investor, he added.

Television households in the key cities of New Delhi, Mumbai, Kolkata and Chennai have to mandatorily install a set-top box to view digital television signals before June 30 in the first phase. Nationwide digitisation is expected to be completed by the end of 2014.

A senior executive with the cable company who did not wish to be identified said that the increase in FDI will help the industry raise capital for digitisation as large amount of investments are required for the digitisation process.

Ms Smita Jha, consulting head-media and entertainment practice PwC, said, “A large number of international media companies do not want to make investments in the country unless they get a majority stake in the company.”

According to industry sources some of the leading international cable companies like Liberty Inc have been making the rounds to understand the Indian market.



>shishir.s@thehindu.co.in

Published on April 26, 2012

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