Cable digitisation gets a leg-up via automatic route

Companies in the teleports, direct-to-home, cable networks, mobile TV and headend-in-the-sky (HITS) sectors can now get 100 per cent foreign direct investment (FDI) through the automatic route.

Last November, the FDI regulations for companies in the broadcast sector were relaxed to allow 100 per cent foreign investment in the aforementioned sectors — 49 per cent through the automatic route and beyond 51 per cent via the government route. Under the new reforms, FDI guidelines for terrestrial radio (FM channels), news channels, and non-news channels remain unchanged.

While 100 per cent FDI is allowed in non-news channels through the automated route, news media and FM radio are allowed up to 49 per cent FDI under the government route.

Ashish Pherwani, partner and head – advisory, media and entertainment, EY, “Digitisation of TV distribution requires large investments of infrastructure, with long-term return timelines to manage on-ground realities. Higher FDI will enable healthier balance sheets and help speed up the process of digitisation. It will also bring in leading global practices and enable greater transparency.”

Currently, companies like Fox (through STAR and Sky) have interests in cable and DTH companies.