Government issues DTH notification, 20 % sectoral, foreign equity cap to stay

After interminable delays, the government yesterday finally issued an executive order on direct-to-home (DTH) telecast in India and it has confirmed the industry’s worst fears.

There are no changes from the DTH guidelines issued on 1 November 2000. Concerted industry lobbying for modifications in two principal aspects of the guidelines have been ignored.

The notification limits broadcasting companies’ equity participation in the venture as well as foreign direct investment to 20 per cent. The other issue for which broadcasters pushed hard was the revenue sharing arrangement. Broadcasters had sought a five-year moratorium on revenue-sharing but the government has stuck to its original stipulation – a revenue sharing arrangement of 10 per cent as annual fee for the licence period of ten years.

The notification states that aside from the 20 per cent FDI ceiling, the rest of the finances could be raised from non-resident Indians (NRIs), foreign institutional investors and overseas corporate bodies.