Indian Authorities Mull Raising Foreign Investment Cap

June 30, 2010 World Screen
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NEW DELHI: The Telecom Regulatory Authority of India has recommended that the country increase the cap on foreign investment in DTH, IPTV and cable distribution platforms to 74 percent from the current 49 percent.

The new 74-percent limit would also apply to mobile TV platforms, TRAI said, which currently do not have any foreign investment caps. TRAI also called for the 26-percent cap on investment in news and current affairs channels to be maintained. Non news and current affairs networks uplinked or downlinked in India will continue to have no foreign investment limits.

TRAI also notes that all foreign investment above 26 percent would require consent from the government. Its recommendations have been submitted to the Ministry of Information & Broadcasting.

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Increasing the limits on foreign investment in platforms is expected to help operators, particularly on the cable front, upgrade their infrastructure and roll out advanced services in what is seen as a high growth pay-TV market. Media Partners Asia (MPA) recently forecast that India’s pay-TV sector will deliver revenues of $12.1 billion by 2014 and $18.5 billion by 2020, up from $6.5 billion for the fiscal year ended March 2010. As of the year ended March 2010, local cable operators delivered revenues of $2.9 billion, with an EBITDA profit of $801 million.

MPA’s research also notes that the number of pay-TV subs in India will rise from 105 million last year to 149 million in 2014 and 173 million by 2020. Cable will dominate, with a 70-percent market share through 2014, falling to 64 percent by 2020. The DTH pie is expected to rise from 17 million subscribers in 2009 to 45 million in 2014 and 58 million in 2020. By 2012, India will become the world’s largest DTH market with 36 million homes. Digital cable will also see steady gains, increasing to 17 million by 2014 and 29 million by 2020. Cable broadband, a key driver of future cable sector profits, will grow from 850,000 homes in 2009 to 3 million by 2014.