Foreign cable firms want PM to relax rules

Foreign cable companies like Liberty Global Inc, Macquarie Media Group and Star Group want the prime minister to intervene in the digital broadband policy initiatives for the cable industry.

They say the existing regulatory environment governing the cable industry discourages them to make the necessary investments required in the cable industry for its upgrade from analogue cable to a digital broadband one.

It is estimated that foreign investors are ready to pump in Rs 35,200 crore in the cable industry over next four years. While a 49 per cent foreign direct investment (FDI) in the cable industry is acceptable to foreign investors, they are wary of the controls imposed on the cable industry by the Telecom Regulatory Authority of India (Trai).

According to a detailed report made by Hong Kong-based Media Partners Asia (MPA) on behalf of these companies the regulation for broadband digital cable by Trai against any government supervision goes against the free market spirit of India and impedes further development of the cable industry.

"Current regulations hold back the growth of cable industry in India. A lighter approach might be necessary to encourage significant investments required to develop broadband and digital industry," Shane O'Neill, chief strategic officer and board member, Liberty Global Inc said in the report.

Liberty Global operates and invests in broadband communications network in 17 countries including Japan, Chile, Australia and Europe. It is in talks with cable companies for investment opportunities.

Macquarie Media Group is an investment vehicle listed on the Australian Stock Exchange and aims at making investments and acquisition in media companies globally.

According to MPA report, $200 per subscriber will be required to upgrade from an analogue cable system to digital two-way broadband network-an investment none of the local cable companies can afford to make.

Out of the 71 million cable homes, only 350,000 have access to broadband, which accounts for only Rs 450 crore in revenue. While the broadband penetration in India is less than 2 per cent, its over 13 per cent in China and 8 per cent in Brazil.

Foreign companies want a new direction in regulation for investments in India.