that point in time, the only player to be seriously affected
by the governments order was News Television India
(NTVI), owner of the well-known Star Plus channels. NTVI
had only four months back, in March 1997 to be precise,
made a grand announcement that it would be launching its
DTH service in India, entailing an investment of about
suddenly, as if out of the blue, the ban came. And why?
Though wags said that the decision was at the behest of
a rival TV channel, the government's official explanation
was, "A direct satellite service to consumer homes
via small receiver dish antennas could set off a cultural
invasion by foreign broadcasters, which could prove detrimental
to national interest."
argument was that because of their ability to reach directly
into Indian homes without any intermediary, the signals
could pose a threat to national security as well as Indian
culture causing moral and social turpitude.
it mean that moral and social values stand changed three
years later? Well no!
actual reason lies in the fact that new technology has
now ensured that similar programs, earlier sought to be
banned, can be accessed easily through the Internet and
therefore it made little sense for the government to continue
with its earlier directive.
government confirmed this when the minister stated at
the press conference that the ban is no longer valid in
view of vast technological changes. According to her,
with the relaxation of the ban, a positive step has been
taken towards convergence. She went on to add that DTH
would provide a broad-band backbone for convergence and
IT enabled services besides using superior technology
for distribution and reception of television programs.
good reason for the government to withdraw the earlier
order could have been the report prepared by FICCI in
March 2000 at the request of Indian entertainment industry.
report clearly stated that the ban on KU-band reception
equipment should be lifted. The report pointed out that
the rationale for introducing this ban no longer existed,
considering that in the near future channels may be broadcast
on the world-wide-web, which can be directly received
by subscribers at their homes. It also said that since
cable operators have not shown any interest in laying
cables in less densely populated localities, one way for
the government to rectify the situation was to permit
final thaw came in the form of a green signal given in
October 2000 by a group of ministers appointed by the
government, in January 2000, to look into the matter and
give recommendations on DTH operations in India.
group consisted of senior ministers in the government
and included Mr. LK Advani (home minister), Mr. Arun Jaitly
(then information and broadcasting minister), Mr. Pramod
Mahajan (information technology minister), Mr. Yashwant
Sinha (finance minster), Mr. George Fernandes (defence
minister), Mr. Ram Vilas Paswan (telecommunications minister)
and Mr. Ram Jethmalani (then law minister).
much deliberation, the group finally gave the go-ahead
to the government with certain cautionary riders. These
license should not be given exclusively to any agency,
private or public, to avoid monopoly in the sensitive
areas of information and program distribution.
DTH is an alternative to cable for distribution of
TV programs, the vertical integration of these two
services should be guarded against to avoid monopoly
in distribution services.
integration and monopoly between DTH operators and
TV channels should be avoided to ensure fair competition
and a level playing field for all TV channels.
distribution through a DTH platform should be uplinked
from India to ensure that they comply with programming
and advertising codes and allay concerns about national
keeping with this overall clearance, the ministry of information
and broadcasting framed the policy for the launch of DTH
services in the country. These included:
Indian companies, registered under the Companies Act,
will be allowed to apply for such licenses
foreign investment in DTH companies, through whatever
means, will not exceed 49 per cent of the total equity
the total equity of the company, the holding of broadcasting
and/or cable companies cannot exceed 20 per cent
will vest with Indian residents and the chief executive
has to compulsorily to be an Indian who will be responsible
to ensure that no cultural invasion takes place from
broadcaster will not violate the advertisement and
programming codes and not beam channels prohibited
by the regulatory authority
broadcaster will be required to preserve tapes and
cassettes for a minimum period of 90 days from the
day of beaming to enable the government to scrutinise
company will have to pay an entry fee of Rs 10 crore
plus annual revenue sharing with government equaling
10 per cent of turnover
licensee will be required to execute a bank guarantee
of Rs 40 crore, valid for the duration of the license
i.e. 10 years
will be allowed only from India and licensees will
be given one year's time to set up an earth station
DTH operator will ensure a SMS or subscriber management
system and an open architecture set-top box
licenses to be obtained for carrying value added services
such as voice, fax, data and the internet
DTH operator will carry channels of Prasar Bharati
(the state-owned television company) on favoured
financial terms in comparison to any other channel
regulatory authority, in this case the information
and broadcasting ministry, will have the powers to
revoke license and also impose a penalty of Rs 50
crore if rules are violated
Is The Industry Not Biting?
more than two months have elapsed since the DTH was opened
up, a concrete move by broadcasters is yet to emerge,
except for some stray announcements. Zee Network, barely
two days after government's decision to open up, was the
first to announce its intention of setting up a Rs 1,350-crore
DTH service in partnership/joint venture with Sterling
Infotech. There were reports that Sun, Udaya and Asianet
channels would also joint the platform at a later date.
However the announcement clearly noted," The time
frame to launch DTH service will be decided once detailed
guidelines are formulated by the government". A month
later there were reports that the Star Network was considering
opening up a DTH service in partnership with Zee. Sony
also announced its intent of putting in place a multi-crore
DTH platform by 2002. However, these have merely remained
announcements and nothing concrete has emerged yet.
biggest stumbling block preventing DTH from taking off
is the sectoral cap of 20 per cent on broadcasters. The
cap is proving to be the biggest hurdle in bringing in
the investment required to put in place a DTH service.
Mr. Yash Khanna, corporate communications manager, News
Television India told domain-B,
"With total investment requirement of
about Rs 2,000 crore, where will the money come from unless
the cap is removed? As returns from DTH will accrue only
after about 5 years, will shareholders not stand up and
ask questions if big investments are made and returns
do not come in?"
Subhash Chandra, chairman Zee Network and chairman of
the National Media Committee of the Confederation of the
Indian Industry (CII) is very clear that, while the government
had the right to keep consumer interests in mind, the
move to restrict equity holding of broadcasters to 20
per cent, will only prevent them from moving from their
existing C-band to the KU-band.
went on to add that the government ought to define monopoly,
based on the viewership for a broadcaster or the number
of homes reached in the case of a cable operator. The
committee suggested that restrictions on equity could
be imposed on broadcasters, whose viewership is in the
range of say 50 per cent to 60 per cent of the television
homes or big players with a greater reach in the cable
other hurdle is the clause, which requires broadcasters
to share 10 per cent of their revenue with the government.
Says Mr. Rajesh Pant, chief operating officer, Sony Television,
"the DTH service provider will have to cough up 10
per cent of its revenues to the government, whether its
company is making profits or not." With profits expected
to flow in only after 5 years, broadcasters have demanded
that a 5-year moratorium be imposed on the annual revenue
sharing of 10 per cent.
economic viability is the most important barometer for
any commercial venture and DTH is no exception. Unless
the government and the broadcasters sort out their differences,
DTH will remain a non-starter as far as India is concerned.