TRAI Recommends 49 % FDI-FII for FM Radio

The Telecom Regulatory Authority of India (TRAI) on Monday released its recommendations on foreign investment limits for broadcasting sector. The FDI and FII limit for Mobile TV, DTH ,Cable Networks , Teleport (Hub) and HITS has been recommended to be increased to 74 %. While TRAI has yet to draft FDI-FII recommendations for satellite radio, FDI-FII limit for FM radio sector has been enhanced from 20 % to 49 %.

“Foreign investments have an important role as a source of funding in the development of the sector. Foreign investments have other benefits also such as bringing in new technology, international best practices, and access to export markets. However, the extent of foreign investment is also conditioned by considerations such as national security, preserving socio-cultural fabric of the country and protection of domestic industry,” R. N. Choubey,Principal Advisor (B& CS) ,TRAI said.

The Ministry of Information and Broadcasting had sought recommendations of the Authority on Foreign Investment limits for various segments of Broadcasting Sector vide letter dated December 11, 2007. The letter specifically mentioned teleport, DTH, satellite radio, HITS, cable operators and FM radio segments of the Broadcasting Sector. The letter also indicated the proposed changes in foreign investment limits being considered by the Government.

In line with its consultative approach, the Authority had issued a Consultation Paper on March 3, 2008 for comments from the stakeholders before giving its recommendations to the Government on Foreign Investment limits for various segments of Broadcasting Sector. An Open House Discussion was held by the Authority on these issues on 4th April, 2008 in Mumbai. The Authority has examined the comments received during the consultation process and finalized its recommendations after taking these into consideration.

“The recommendations also cover the procedure for approval and suggest that within the composite foreign investment limit of 74% (wherever applicable) for carriage services, foreign investments upto 49% may be permitted under the automatic route, beyond which FIPB approval would be required as prescribed for the telecom sector. For content services, it has been suggested that FIPB approval should be required for foreign investments. The methodology for calculation of foreign investments in different segments of broadcasting is also proposed to be standardized. In this direction it has been recommended that methodology used in telecom sector for calculation of foreign investments should be adopted for the broadcasting sector ,” R. N. Choubey, Principal Advisor (B& CS) ,TRAI said.

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