In what could pave the way for further consolidation and faster digitalisation in the Rs 23,000-crore cable industry, the information and broadcasting ministry (I&B) is considering a differential FDI cap within the cable networks for multi-system operators (MSOs) and local cable operators (LCOs). While it may propose an increase in the FDI limit for the MSOs to 74% from the existing 49% to align it with the proposal to raise FDI cap for other distribution medium like DTH, HITS, mobile TV, the FDI ceiling for LCO is most likely to remain unchanged at 49%, according to a ministry official. The MSOs are distributors who could either deliver TV content directly or route it through the LCOs. The broadcast regulator Telecom Regulatory Authority of India (Trai) had recently recommended that MSOs and LCOs should be brought under licensing regime from the existing registration system. It further said that MSOs and LCOs should be licensed separately.
Although accurate figures are difficult to ascertain in the largely unorganised sector, according to MSOs’ own estimation—of the 78 million cable homes around 50 to 60% are catered to by the 6,000 MSOs currently. Over 60,000 to 65,000 LCOs command the rest of the households. However, the three largest MSOs claim of a subscriber base that is equivalent to almost 20% of the total cable homes. According to Jagjit S Kohli, promoter of Digicable Network (India) Pvt Ltd, “Once the proposed move is implemented, it will accelerate the process of digitalisation by attracting more investment into the sector.” Last year, the UK-based Ashmore Investment Management Ltd had bought 49% stake in the Digicable Networks for Rs 41 crore.
Despite Trai recommending a hike in the FDI limit in the cable sector along with other carriage platforms, earlier this year, the ministry had shown its reservation in considering the same. The ministry felt that since a lion’s share of households is served by cable sector, it wouldn’t be appropriate to allow the reins to be transferred into foreign hands. Trai and some MSOs had argued that since the sector constitutes around 70,000 players, it is inconceivable that even after consolidation, all these networks will pass into foreign hands. The cable network can face competition from DTH players more efficiently by revamping itself if they manage better access to financial resources. The cost of upgrade to a two-way 750-850 mhz broadband digital cable network from the current analogue...
Source @ FDI cap hike to prop up multi-system cable TV networks - The Financial Express
Although accurate figures are difficult to ascertain in the largely unorganised sector, according to MSOs’ own estimation—of the 78 million cable homes around 50 to 60% are catered to by the 6,000 MSOs currently. Over 60,000 to 65,000 LCOs command the rest of the households. However, the three largest MSOs claim of a subscriber base that is equivalent to almost 20% of the total cable homes. According to Jagjit S Kohli, promoter of Digicable Network (India) Pvt Ltd, “Once the proposed move is implemented, it will accelerate the process of digitalisation by attracting more investment into the sector.” Last year, the UK-based Ashmore Investment Management Ltd had bought 49% stake in the Digicable Networks for Rs 41 crore.
Despite Trai recommending a hike in the FDI limit in the cable sector along with other carriage platforms, earlier this year, the ministry had shown its reservation in considering the same. The ministry felt that since a lion’s share of households is served by cable sector, it wouldn’t be appropriate to allow the reins to be transferred into foreign hands. Trai and some MSOs had argued that since the sector constitutes around 70,000 players, it is inconceivable that even after consolidation, all these networks will pass into foreign hands. The cable network can face competition from DTH players more efficiently by revamping itself if they manage better access to financial resources. The cost of upgrade to a two-way 750-850 mhz broadband digital cable network from the current analogue...
Source @ FDI cap hike to prop up multi-system cable TV networks - The Financial Express
