FDI call on satellite radio soon


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NEW DELHI: The government is close to finalising the satellite radio policy in the country, under which it is proposed that the FDI cap in the sector be lowered to 49% from 100%. This comes despite Trai recommending that 100% FDI be allowed in the sector.

This implies that WorldSpace India (the only player in this space in India currently), a wholly-owned subsidiary of US-based WorldSpace, will soon have to offload 51% stake to an Indian partner. India is the biggest market for WorldSpace and accounts for close to 75% of its global subscriber base.

The move to lower the FDI cap in satellite radio comes close on the heels of the department of posts proposing a similar step with regard to global courier players who have operations in India.Sources said the 49% FDI cap was meant to bring satellite radio policy at par with those for cable TV and DTH, which offer services on satellite-based platforms.

The 20% FDI cap for FM radio could not be applied to satellite radio as both use different technologies for transmission. “We are waiting for the satellite radio policy. We will willingly work according to what the policy stipulates,” said WorldSpace India MD Shishir Lall.

The new satellite radio policy is likely to stipulate that no entry fee be imposed on existing/new players but an annual licence fee of 4% of gross revenues from India be levied on satcasters, similar to that levied on FM radio players.

WorldSpace India has proposed in its earlier discussions on the issue that the annual licence fee be nominal in nature, since the frequencies to which the fee would attach are used internationally and not just in India.

The licence period is likely to be 10 years, with an automatic extension of five years. The policy may also state that uplinking of satellite radio stations from India be encouraged but not made mandatory.

WorldSpace currently uplinks from Singapore. The company has already acquired FIPB’s clearance to carry out “software programming activities in the field of sports, education, to import and sell WorldSpace receivers, to carry out customer care centres and to carry out various services to its parent company in realising its revenue opportunities”.