74% Foreign Equity Cap For Tv Software Firms

Information and broadcasting minister Sushma Swaraj has said that foreign equity in TV software companies, not directly related to broadcasting, will be capped at 74 per cent. This has been communicated to the industry ministry.

Swaraj favours100 per cent foreign equity in ad agencies. But she is yet to take a final view on this matter pending a round of discussion with Indian agencies. The Foreign Investment Promotion Board has been keeping on hold several media proposals, pending a policy guideline on this by the I&B ministry. The ministry's decision will now pave the way for approval of all the FDI proposals in this sector.

 

The minister said that before the end of the winter session, by when the broadcast bill is expected to be enacted into a law and uplinking for all channels beaming into India made mandatory, broadcasters , especially foreign ones, would be given a chance to set up their uplinking base here. The move is aimed at making India a hub for uplinking and ending VSNL's monopoly as the sole gateway. Swaraj, who also heads the communications ministry, said in the fourth round of bidding for basic telecom services, she favours the revenue sharing method as it has a "sound base."

In an exclusive interview to Business Standard yesterday , Swaraj said, "We have taken a policy decision that in media proposals of companies relating to FDI which are indirectly linked to broadcasting like TV software companies foreign equity be capped at 74 per cent." But, the minister pointed out, her ministry is not averse to 100 per cent foreign equity in advertsing agencies. "I'll discuss the case with Indian agencies and see what the indegenous ad agencies feel before making a policy. But if the Indian companies do not have any objection on foreign companies hiking their stake to 100 per cent , then I have no problem in supporting such a proposal," she said.

Pointing out that eight Indian broadcasters would start uplinking from India via VSNL in the next few days, the minister said since uplinking would be made mandatory for everybody, facilities and time would be given to all operators to set up uplink stations.

"This would end VSNL's monopoly (as the sole gateway from India) and also turn the venture into a commercial venture, making India an important hub for uplinking" When the Broadcast Bill is enacted into a law, permission for uplinking would be given to all operators. She, however, said that till all the infratsructure facilties for uplinking would be in place, VSNL would be charging Indian broadcasters Rs 6 lakh/year as uplinking fee.

The minister said the I&B ministry would seek cabinet approval in the near future for allowing uplinking stations to be set up in India . The cabinet has okayed the ministry's proposal to grant uplinking rights to private Indian broadcasters with 20 per cent foreign equity only for the present. "We are preparing a note on this and the announcement would come soon," Swaraj said, refusing to give a time frame.

Swaraj, however, categorically ruled out allowing foreign participation in print media ventures. "That is why I have also rejected Reader's Digest proposal (to acquire the publishing assets of a Tatas-promoted company publishing RD in India).

Asked how come Tata Donnelley Ltd (with foreign equity ) is bringing out an auto magazine, Overdrive, in India, Swaraj said she'd verify the facts first and then look into the matter how permission was given for such a venture.

Swaraj, who has been in the eye of storm over the Prasar Bharati ordinance, said files have been moved to the selection committee of Prasar Bharati, asking them to fill up the post of the chief executive and finance and personnel members. "But we have not made any suggestions on names informally or formally." Setting aside the allegations made by the ousted CEO of Prasart Bharati that the ordinance was aimed at removing him, Swaraj said, "The (amended) Prasar Bharati system was disastrous, not the perosn(s). Now with member finance and member personnel also getting equal powers as the CEO there would be collective decision making."

Dwelling on the telecom scenario, Swaraj opined that revenue sharing as a norm is a sound method for future bidding in basic telecom services as previous schemes have given rise to chaos.

"We have given the Telecom Commission both the options (licence fee or reveneue sharing-based norms), but in new businesses revenue sharing forms a sound base _- earn more, share more; earn less share less," the minister explained. She pointed out that VSNL's disinevstment plans are on schedule but VSNL will decide whether to hold new road shows and beauty parades. "The time given is September...(and) everything is on schedule. VSNL should have been the first (company to start off with disinvestment) and we are working on this assumption only."