The WorldSpace collapse brings into focus the fact that India still has no satellite radio policy. WorldSpace, which started its service in India in 2000, has been operating without any policy framework so far.
The information and broadcasting ministry has prepared a draft cabinet note for a satellite radio policy, but now this is likely to be put on the back burner as WorldSpace was the only such channel operating in India. (See: Music-lovers jarred as WorldSpace downs shutters)
In the absence of a policy, there is no imposable limit on foreign direct investment in satellite radio. The new policy was expected to cap FDI in this area at 74 per cent. The draft note had also indicated that WorldSpace would be given three years to comply with the guidelines.
The lack of policy also stymied the company's efforts to open up other revenue streams, even proposing to stream its music through the internet. But these proposals ran into regulatory hurdles, because there were no clear guidelines.
In 2008, WorldSpace India sought permission from the Foreign Investment Promotion Board to invest in a call centre and a digital recording studio in India. The proposal was rejected since there was no clarity on which agency or what policy governed a satellite radio operator.
In April 2009, the company again sought permissions from the FIPB to stream music through its website. Once again, the proposal did the rounds of various agencies and was deferred.
But what is certain is that music lovers understandably hooked to this channel are in for a long spell of cold turkey - with no clear guidelines in the offing, it is unlikely that any other service be in a hurry to fill the vacuum left by WorldSpace.