Response Magazine - April 2008

Foreign direct investment (FDI) may be on the rise for the media in India, according to Asia Times Online. The newspaper has reported that the Telecom Regulatory Authority of India (TRAI) has recommended allowing 74-percent FDI in the broadcast sector, up from the current 26 percent and on a par with telecommunications as the country looks to merge telecom with other media. Cable and direct-to-home TV services are both allowed 49-percent FDI, but only 20 percent can be a direct foreign holding, with the rest being foreign institutional investment. FM radio FDI stands at 20 percent. Internet service providers and non-news TV broadcasters are allowed 100 percent FDI. TRAI had also recommended 74-percent FDI for a satellite-based system to distribute TV signals via cable. And TRAI has recommended the same percentage for cable TV services and 100 percent for services downlinking general and entertainment channels delivered from outside India. The government has agreed to allow 122 new FM radio channels early this year and has invited tenders for another 97 channels. India also plans to unveil policy guidelines to regulate the content shown by service providers on Internet Protocol Television. Source: Asia Times Online

FDI May Rise in Indian Media

extensively, which results in restrictions for the industry as a whole,” Kuhne says. “Legislation is very often vague and handled differently in different provinces and for different channels. While I am strongly convinced that the Chinese consumer is very receptive to DRTV, the whole industry is still being treated with great caution by the relevant authorities.”

Partnering to Profit

So how do DRTV marketers capitalize? In a word, partner — at least for now. The stumbling block to go it alone is foreign direct investment (FDI).

Vinod Agarwal, with TV Skyshop, a DRTV company in India, says the Indian government doesn’t allow FDI in the retail industry and that DRTV companies will need to partner until that changes.

Ghai says some networks are establishing home shopping ventures. A good example, she says, is TV18, a business

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