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FDI in broadcast: Home, I&B Min raise security concerns

Press Trust of India/New Delhi 05 Aug 12 | 12:19 PM

The Home and Information & Broadcasting ministries have raised security concerns over DIPP's proposal to hike FDI cap in broadcasting services like Direct-to-Home and cable TV networks to a uniform 74%.

"There are some security issues involved in it, which the two ministries have raised. How to do the shareholders verification," an official told PTI.

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One of the biggest concerns is how to prevent global media barons, who have a track record of exceeding their brief and influencing policies from entering the business, the official said.

However, few important ministry's, including Finance and External Affairs have already given approval to the note.

The Department of Industrial Policy and Promotion (DIPP), under the Commerce and Industry Ministry, which deals with foreign direct investment (FDI) related matters, had circulated a draft cabinet note on the issue.

The DIPP had proposed that FDI limit in the broadcast carriage services providers, including DTH, Head-end in the Sky (HITS) and cable TV must be uniform. HITS is a satellite multiplex service that provides TV channels for cable operations.

At present, 49% FDI is allowed in cable TV and DTH, while it is 74% in HITS.

However, for TV news channels, FM radio and content providers, the FDI limit will stay at 26%, as per the DIPP proposal.

The official said uniformity has been proposed keeping in view convergence of technologies in the broadcasting and telecom sectors.

In June 2010, Telecom Regulatory Authority of India (Trai) had suggested to raise the FDI for broadcast carriage services like DTH to 74%.

As per an estimate, there are about 106 million households with cable and satellite TVs in India, of which 26 million use DTH and 80 million get feed from the cable network.

Among different segments, 74% foreign direct investment (FDI) would be considered in mobile TV, which is an area of future growth.

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