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Star India seeks liberalised FDI regime for TV news, DTH
MUMBAI: Star India has shown appetite to ramp up its investments in India. If the government removes foreign direct investment (FDI) constraints in TV news and direct-to-home (DTH) sectors, the 21st Century Fox subsidiary will be keen to flow in new investments.
In its response to TRAI’s pre-consultation paper on ‘Ease of doing business in TV broadcasting’, Star India has urged the regulator to ensure a level playing field for foreign and domestic broadcasters in owning stakes in the distribution platform business.
Star said that the cross-holding restriction of 20% in DTH is unfair to foreign broadcasters as domestic broadcasters are able to evade these requirements through corporate structuring, which is out of bounds for foreign broadcasters.
The broadcaster further submitted that there is enough competition in the DTH sector to take care of anti-trust issues.
It further stated that the Competition Commission of India (CCI) looks into complaints pertaining to anti-competitive practices or abuse of dominance issues.
“In such scenario, the blanket restriction on broadcasters restraining them from directly investing in a DTH entity and vice versa seems out of place,” Star said in its submission.
“Furthermore, distribution platforms are running their own channels that are not even registered with the central government, but TV channels cannot have a stake in a DTH platform in excess of 20%. Such irrational skewedness need to be addressed at the earliest,” it added further.
In the DTH space, 21st Century Fox effectively holds 30% stake in DTH operator Tata Sky, in which Tata Group is the bigger partner with 60% stake while Temasek holds the remaining 10%.
While the FDI limit in TV distribution platforms like DTH is 100%, the Ministry of Information & Broadcasting (MIB) has imposed a restriction of 20% cross-holding that a broadcasting entity can hold in a DTH firm.
It is pertinent to note that TRAI has recommended removing cross-holding restriction on broadcasters and DPOs to the MIB.
On TV news, Star submitted that the business of news broadcast in India is reeling from serious investment and fund crunch. To ease the same and improve the quality of news content in the country, FDI regulations for this sector need to be relooked, it said.
Specifically, the requirement to have an Indian shareholder holding the single largest shareholding needs to be revisited, it added further.
Currently, foreign companies can own up to 49% in TV news channels. The other 51% should be held by a single Indian partner. In non-news, 100% FDI is allowed.
Star was present in news broadcasting through its joint venture with the ABP Group. The JV, Media Content & Communication Services (MCCS), ran three channels Star News, Star Majha and Star Ananda. Irked by the FDI restrictions, Star sold its 26% in MCCS to senior partner ABP. The channels were subsequently rebranded ABP News, ABP Majha and ABP Ananda.
Star has also sought clarity with respect to filing of fresh application where 100% FDI is allowed through automatic route.
The Union cabinet had recently abolished the Foreign Investment Promotion Board (FIPB), the nodal body for approving FDI under approval route, and allowed respective ministries/departments to process FDI applications of their departments.
TRAI had on 19 April issued a pre-consultation paper on ease of doing business in the TV broadcasting sector in India. The objective of the pre-consultation paper was to take forward the government’s efforts towards ease of doing business.
Through the exercise, TRAI aims to review various policy issues related to the broadcasting sector with a view to creating a conducive and business-friendly environment in the sector.