With An Eye On Convergence, Indian Government To Review Foreign Investment Limits In Media

The convergence of broadcasting and telecom is making the Indian government take another look at policy – specifically, the Foreign Investment limits that govern the sectors. As we’ve mentioned before – here – India suffers from a legacy of licenses, since foreign investment limits for broadcasting and telecommunications were set at different times. So it’s a late, but much needed move from the government to ask the telecom regulator TRAI to take another look at Foreign Investment limits. I think the changes should ideally have been made before the recommendations for IPTV and Mobile TV. The proposed changes to Foreign Investment are as follows:

As per the consultation paper on FDI limits released by the TRAI: the delivery of TV signals though DTH has an FDI limit of 20 percent, 49 percent through cable and 74 percent through IPTV. The TRAI believes that even though the content being provided remains the same, the difference in FDI limits unfairly favours one technology against another, overriding considerations of efficiency and effectiveness. At the same time, the regulatory framework should ensure a level playing field for new convergent technologies – in particular, digitalization and the increasing use of Internet Protocol. So, another point under consideration is about whether the foreign investment limits for telecom and broadcasting sectors should be made the same (74 percent).

The other issue that is getting some consideration: about whether content should be separated from carriage for the purpose of establishing investment limits, with liberal investment limits for carriage, and conservative for content. A couple of other interesting issues:

5.3.3. Whether the methodology for calculation of foreign investments in different segments of broadcasting sector should be standardized.
5.3.4. Whether the foreign investment limits should be raised to 100% so as to permit companies incorporated in India but with 100% foreign holding to provide broadcasting services in the country with appropriate monitoring mechanism in place coupled with content regulation through programme and advertising codes.

Download the consultation paper here.

Comments have been disabled for this post