74% FDI cap on satellite radio

The Telecom Regulatory Authority of India (Trai), whose ambit also covers the broadcasting business, has prepared guidelines on satellite radio operations that will limit foreign direct investment (FDI) to 74 per cent and introduce licence requirements for transmission and content.

Currently, WorldSpace is the sole satellite radio service provider in the country but it has been operating without a licence in the absence of guidelines for the sector.

As part of its recommendations, which are expected to be announced in a few days, the regulator has proposed a one-time entry fee of Rs 2.5 crore and an annual revenue share equivalent to 4 per cent of radio companies' gross revenues.

The licence conditions will also prohibit radio companies from selling commercial airtime to advertisers. Service providers will also need to register every channel they air. News content will be permitted only from state-owned Doordarshan and All India Radio.

The Trai recommendations will impact the radio business of WorldSpace, requiring it to reduce its foreign equity from 100 per cent to 74 per cent and discontinue broadcasting private news channel stations in India other than paying the entry fee and sharing revenue with the government.

The company, which offers fee-based services, has seen a marginal drop in subscribers in its India subscriptions in 2008