(18 March 2008 4:30 pm)

NEW DELHI: The government is going to rationalise the licence fees for the direct-to-home (DTH) sector and is actively considering the reduction of taxes, said information and broadcasting secretary Asha Swarup.

The government is also reviewing the foreign investment limits and it could be kept higher at 74 per cent in the case of infrastructure and platform services like teleports, DTH, Headend-In-The-Sky (HITS) and satellite radio, said Swarup.

No changes are proposed in the 26 per cent foreign holding cap on news and current affairs channels and 49 per cent for cable TV operators.

Swarup was speaking at the Casbaa event on "India Satellite Forum - New Challenges, New Opportunities."

Regarding DTH, Swarup said that the government had studied the complaints of the operators who had criticised the present license fee at 10 per cent of the gross revenue as irrational and illegal.

"We have looked into their points of view and license fees will be reduced," she said, without however stating whether it would be what the DTH players want: four per cent of gross adjusted revenue.

Swarup also said the government is actively considering reducing tax burden on the DTH platform and would talk to the state governments as well.

"All options for the enhanced growth of the DTH platform are being explored," Swarup added.

One key factor issue is the interoperability of set-top boxes (STBs). The government is in discussion with the DTH service providers on this issue. It will make clear its views on this shortly, Swarup said.

The government is considering a "composite policy" on the FDI (foreign direct investment) and FII (foreign institutional investor) cap, taking into account all sectors.

On digitalisation, Swarup said that government was looking at a suitable regulatory regime and the Planning Commission road map would be followed, with Delhi getting digitalised by 2010, followed by other areas latest by 2017, the year that the current Plan period comes to an end.

However, she added that there would be no sunset year when analogue would be completely switched off, as this would not be possible in a country like India.

Swarup confirmed the report of indiantelevision.com on 17 March, that Cas would be extended to the rest of the areas under the three metros.

She refuted the broadcasters' criticism of Cas as inhibiting, stating that despite Cas, there are 300 channels running and 80 more under active consideration for licensing from the ministry.

The price cap on channels, Swarup added, is not a thing in perpetuity and there could be a sunset year on that, possibly by 2011.

The government was worried about the piracy issue and also of Quality of Service, she said, adding that the multi-system operators (MSOs) have also been told to solve billing problems.

Reportedly, she had asked the MSOs in a meeting at the ministry on 17 March, why some subscribers are getting two bills, one from the MSO and anther from the LCO.

Swarup also said that voluntary Cas would be practically impossible unless all MSOs in a city decide to go for it at the same time, as there would be uncertainties in the value chain.