Govt allows 100% FDI In DTH Providers, 20-Yr License, Shared Resources; DTH Stocks Rise
On Wednesday, revised guidelines for Direct-to-Home (DTH) broadcasting services has been approved by the Union Cabinet. This will allow 100 per cent foreign direct investment (FDI) as well as increase the licence period to 20 years.
FDI, License Period & Fee :-
“Due to our Information and Broadcasting guidelines, this field was not getting the benefit of 100 per cent FDI. Now, from today’s decision, after changing the guidelines, the guidelines will have the same guidelines as Commerce Ministry, and will come under 100 per cent FDI” said Prakash Javadekar, Union Minister for Information and Broadcasting (I&B).
Currently the licenses are issued for a period of 10 years, and will be revised to a period of 20 years, and will be renewed for a 10-year period. The license fee has been revised from 10 per cent of gross revenue (GR) to 8 per cent of adjusted gross revenue (AGR), which will be calculated by deduction of GST from GR.
Also, rather than paying the license fee on annual basis, broadcasting firms will now have to pay the license fee on quarterly basis.
The government said in a statement that the revised guidelines “may also enable DTH service providers to invest for more coverage leading to increased operations and higher growth and thereby enhanced and regular payment”.
Sharing The Infrastructure :-
The government statement allowing the DTH operators to share infrastructure said that “DTH operators, willing to share DTH platform and transport stream of TV channels, on voluntary basis, will be allowed”.
“Distributors of TV channels will be permitted to share the common hardware for their Subscriber Management System (SMS) and Conditional Access System (CAS) applications.”
The government noted that sharing of infrastructure by the DTH operators, “may bring in more efficient use of scarce satellite resources and reduce the costs borne by the consumers”. In another decision, the Cabinet also approved the merger of four of its film media units — Films Division, Directorate of Film Festivals, National Film Archives of India, and Children’s Film Society, India — with the National Film Development Corporation (NFDC) Ltd. This was done keeping in mind the fact that there was “duplication” between some of these organizations. Javadekar said, “After coming together, the governance will become better”.