DTH gets cabinet nod with 20 per cent cap on FDI

The Union government last Thursday cleared the controversial direct-to-home (DTH) services after putting it on hold for years. DTH refers to distribution of multi-channel television programmes in KU band by providing TV signals directly to the subscriber’s premises.

Making the announcement at a press conference after the Cabinet meet, Information and Broadcasting Minister Sushma Swaraj said DTH will be a free platform with a restriction of 20 per cent cap on foreign direct investment (FDI). The total foreign investment in DTH cannot exceed 49 per cent -- 20 per cent FDI and 29 per cent through FIIs or NRIs.

To acquire licence for providing DTH services, a company will have to pay Rs. 10 crore as entry fee. Moreover, the company will have to share its annual revenues with the government. Said Swaraj: "Ten per cent per year of the revenue collected by the company will be payable to the government as annual fee."

The minister said the government has kept in mind all concerns raised at various stages of the DTH discussions by the Group of Ministers (GoM). "After a series of debates, the GoM came to the conclusion that no monopoly is good." So, she added, the government has allowed an open competition in DTH, with restrictions thrown in.

Apart from the foreign investment regulations, there are some more norms which any DTH player will have to conform to. First, uplinking has to be done from India. Second, the earth station must be built in India. Third, programme cassettes cannot be destroyed within 90 days of running a programme.

These steps, she said, will help the government monitor the programmes and the advertisements run on the DTH platform. "The programme and the advertising code will be applicable here too," Swaraj stressed. The minister added that if any DTH player is found violating the programme or the advertising code, there can be a penalty of up to Rs. 50 crore.

DTH services will be operational in another year, Swaraj said, prior to which each licensee will have to put up its own earth station. Also, a legal framework will have to be put in place before licences are issued to various applicants.

On the whole, clearance for the DTH is a major step towards convergence, Swaraj summed up, and it can provide a broadband backbone for IT-enabled services too.

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