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‘Strict rules holding up foreign investment in cable-TV industry’

‘Strict rules holding up foreign investment in cable-TV industry’
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First Published: Sat, Mar 24 2007. 04 33 AM IST
Updated: Sat, Mar 24 2007. 04 33 AM IST
India needs to change its policies to ensure that foreign investment starts flowing into the cable television business, according to the Cable & Satellite Broadcasting Association of Asia (Casbaa), an industry body.
At a meeting of the industry in Mumbai, Anjan Mitra, executive director, Casbaa India, said a conducive policy environment could add more than Rs5,000 crore in revenue to the business and result in additional tax revenue of Rs1,800 crore to the government, apart from creating more jobs.
Although Indian laws allow 49% foreign investment in cable TV infrastructure, few Indian cable networks have even seen a proposal for foreign investment come their way. “We need to replace the current intrusive and restrictive policy framework with a more benign regime,” said Mitra. The penetration of digital television in India stands at 6.4% of all TV households, and the country has less than three million broadband subscribers. The organization estimates that China, with a digital TV penetration at 4.1%, will soon overtake India.
The pricing of cable TV services in India is currently regulated by the government. Recent regulations also demand sharing of exclusive content among players and there is no policy support to check under-declaration by cable operators. These issues, Casbaa executives alluded, are holding foreign investment from coming into the industry. “If conditions are right, capital can come from domestic and foreign players,” said Mitra.
Also present at the meeting was Simon Twiston Davies, CEO, Casbaa, who spoke exclusively to Mint on how the pay TV market is evolving in other parts of Asia and where India stands as compared to these markets. Excerpts:
Last year, Casbaa had called for a shift in India’s regulatory approach to the pay-TV industry. Have you noticed any changes?
Not a lot. Change inevitably takes time. Issues like the price cap on TV channels and must-supply of content are still there.
There have been some positives too. The partial deployment of conditional access system (Cas) is a move towards creating a digital environment. The government has made a commitment that once there are more players in the direct- to-home (DTH) space, some of the more intrusive regulations will be lifted. We hope that we’re in the process of proving that we’re creating a competitive environment.
Do you see the recent sports broadcasting Bill as a politically- motivated move?
I’m not going to discuss if these are politically motivated intrusions. They are, though, anti-market.
One of the things that investors want is regulatory assurance, whereas India’s regulatory environment has not been a logical extension of a long- term regulatory roll-out.
You have said that Japan, Hong Kong and Singapore are places where the industry prospered as a result of little regulation. What did they do differently?
Governments, on the whole, have taken a step back in Hong Kong and Singapore. Yes, in Japan, the system has been less than intrusive. You need to let people decide what they want to pay for.
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First Published: Sat, Mar 24 2007. 04 33 AM IST
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