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Star TV clears $300 million for DTH project in India

Media tycoon Rupert Murdoch's Star TV has cleared a $300-million investment to fund a direct-to-home television project in India, a financial daily reported on Friday.

The newspaper said the News Corp subsidiary's board had sanctioned the initial investment for the project and was scouting for local partners to bring in the rest of the investment.

New Delhi has capped foreign direct investment in a DTH project at 20 per cent.

The paper quoted Star TV chief Peter Mukherjea as saying that the network would apply next week to India's Foreign Investment Promotion Board to bring in their share of the equity.

Both Star TV and Subhash Chandra's Zee Television are unhappy with the low ceiling on foreign equity allowed for DTH projects in India and have asked the government to raise the ceiling to a minimum of 49 per cent.

Star TV said a 20 per cent cap on foreign equity amounted to "bridling the key player in a project" that required generous funding.

However, Star TV has decided not to force the issue at this stage.

"We don't want a face-off (with the government over the 20 per cent cap on foreign equity), otherwise the project will never happen," said Mukherjea.

"We want to launch the project, and then justify our case to the government."

Prior to New Delhi's green light for DTH satellite broadcasts in November last year, all satellite channels were delivered via cable, rather than direct to individual satellite dishes.

DTH is now being touted as a revolution for TV viewers, but experts here question how many can afford the new service.

Many believe the majority of India's television viewing public will remain devoted to cable television, due to the relatively high cost involved in switching to DTH.

There are around 30 million cable households in India at present.

Technically, DTH is easily superior to the existing cable service.

DTH will be on the high frequency Ku-Band which offers greater and direct connectivity, more channels through a small dish antenna, and scope for interactive TV services such as movies on demand.

Value-added services like Internet access, e-mail, home shopping and tele-education are also possible.

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