Chillin' out till it needs to be funded
While Tata Sky is doing well with over 50% share and the overall market growing by 80% y-o-y the DTH boom is the one that will get TVs into every home, the latest news for Chaupals and pilgrimages with the weather forecaster in tow 🙂
Bharti is still no. 4 but will easily surpass BIG TV with its sensitive marketing campaigns and thrust on Metro/Cosmopolitan distribution and B Towns
HITS was also launched in 2009
An earlier post about FDI in media from Bharti
Bharti Airtel, India’s largest telecom operator, said that its direct-to-home (DTH) venture, Bharti Telemedia does not require the approval of the Foreign Investment Board (FIPB), as the investment has come from Bharti Airtel’s internal accruals.
Responding to questions raised by FIPB regarding foreign investments in Bharti Telemedia, the company said there is no cash flow or investment from any foreign entity into Telemedia either directly or through Airtel.
In a letter to FIPB, Telemedia said FDI investment into Airtel has been in accordance with the norms and cap in the telecom sector and duly approved by FIPB. “Further, there is no FDI investor who has invested in Airtel specifically for downstream investment in the DTH sector. Accordingly, Bharti Telemedia did not apply for FIPB approval as it was not seeking fresh FDI or overseas investment,” it added.
This communication has come in response to a query from FIPB, which said approval for Bharti’s DTH services was “subject to compounding” (confirmation) by the Reserve Bank of India. Bharti said that “compounding” was not applicable in this case as only Indian money has been invested in Telemedia and no foreign money was routed to the company.
The government had earlier said the shareholding structure provided by Bharti Telemedia did not have FIPB approval and this was not in accordance with existing FDI policy. Last year, the Information & Broadcasting Ministry had also raised questions about Bharti Telemedia not having FIPB approval for foreign investments coming into it on a pro-rata basis through investing firms, including Airtel.
According to the FDI guidelines for DTH, total foreign equity holding in a company should not exceed 49% and the FDI component within the foreign equity should not exceed 20%. Airtel has 40% stake in Bharti Telemedia, while the remaining is held by an “Indian company of the Bharti group”, a Bharti spokesperson said.
Times Now doesn’t believe there’s a need for a uniform FI limit across media sectors. They justify this with the premise that a sudden infusion of foreign investment in some new segments like Radio can stall the progress of (other) companies have only just invested in the segment – they appear to be protecting Radio Mirchi’s turf. Furthermore, the BCCL owned channel wants to ban any further foreign investment in media until a fool-proof process of checking the source of funding is defined. They’ve also proposed that the FDI limit in news not be increased beyond 26 percent. The other BCCL group company Zoom has separately sent in the same document. [pdf]
Telecom bigwig Airtel (pdf), interestingly, doesn’t believe in separating the Broadcast Sector into Content and Carriage services, and suggests that there should just be a separate classification of News Content Service. In terms of methodology for calculation of foreign investment in a broadcast co, they’re far more radical – recommending that foreign holding below 5 percent not be counted as an indirect investment, and also that in case an Indian entity holds shares of a foreign company, and the foreign company invests in another Indian co, then it not be seen as a foreign investment; also, that a foreign financial investment (non-strategic) should not be counted as indirect foreign invesmtment. It’s unlikely that some of these suggestions will be accepted.