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[Satellite TODAY Insider 02-16-11] The Indian Ministry of Information and Broadcasting proposed an increase to its foreign investment caps to help support satellite broadcasters’ efforts to digitize their networks, ministry officials announced Feb. 15.
The current Indian satellite TV foreign investment cap for distribution companies stands at 49 percent. According to documents posted on the ministry’s website, the proposal aims to raise the limit to 74 percent for broadcast carriage services, DTH distribution and IPTV. The ministry also said it plans to increase the foreign investment limit in FM radio stations from 20 to 26 percent and is developing a new investment policy for mobile TV services.
To raise the cap, the ministry said it would work with the Indian Ministry of Finance to provide incentives by reducing customs duties and a tax holiday on digital equipment. As part of the proposal, the Telecom Regulatory Authority of India suggested eliminating import taxes on set-top boxes for the next three years.
The Indian broadcast sector environment constitutes about 106 million cable and satellite households, with 26 million of those customers connected through DTH satellite television distribution companies. Satellite pay-TV operators are beginning to erode the dominance of cable operators within the country, as both Tata Sky and DishTV have launched DTH services in India within the past 12 months.
The India Credit Rating Agency has estimated the five-year cost of the country’s digital broadcast distribution transition at $3.29 billion through March 2015. However, Indian research firm RNCOS released a report Feb. 2 projecting explosive growth in the Indian DTH market over the next two years, with potentially another 20 million subscribers being added by the end of 2013.
RNCOS CEO Shushmul Maheshwari previous told Satellite TODAY Insider that the cable industry, which has dominated the pay-TV market since the early 1990s, now faces tough competition from DTH and IPTV. "At present, the penetration level of DTH and IPTV is low as compared to cable TV (70 percent) but is expected to reach around 35 percent in near future. It is expected that the number of DTH and IPTV subscribers in the country will witness dynamic growth in near future," he said.
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