Govt hikes FDI limit in carriage services

The Union Ministry of Information and Broadcasting has agreed to increase the FDI limit to benefit direct-to-home (DTH), internet protocol TV, mobile TV, headend-in-the-sky and teleport platforms, following a recommendation by the Telecom Regulatory Authority of India (Trai), official sources said. The ministry was of the view that increase in the foreign investment limit would bring uniformity in the FDI ceiling in carriage services. The ceiling was so was 49 per cent with a 20 per cent cap on FDI for DTH.

“The rationale brought out by Trai for increasing the FDI limit is justified in view of the burgeoning growth of the sector which require huge investment and also in view of the convergence of technology,” a ministry official said.

While recommending increase in the FDI limit, Trai was of the view that foreign investment in broadcast carriage services would help the service providers strengthen their infrastructure.
The telecom regulator suggested that broadcast carriage services should be treated at par with telecom services in view of the convergence of technology.

The ministry has also agreed to the Trai recommendation for a 74 per cent foreign investment cap for multi-service operators (MSO) from the present 49 per cent.

It, however, proposed an amendment to the definition of “cable operator” and “persons“ given in the Cable Act, and said it was necessary to do so in order to increase the FDI limit for MSOs.

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