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New policies for cable channels, FM soon

June 03, 2009 12:21 IST

The policy initiatives for Headend-in-the-Sky, the satellite-based digital distribution of cable channels, and the third-phase expansion of private FM radio may soon be cleared by the ministry of information and broadcasting.

Ambika Soni, the new I&B minister, called for a full-presentation on Tuesday on both these issues from senior I&B officials, a day after she took charge of the ministry.

The matter has been pending government approval for 8-10 months and may finally get the nod, said sources in the I&B ministry.

"A detailed presentation was made to the new I&B minister on HITS and FM radio's expansion. These are among the priority areas on which the minister is focusing at the moment," said the source.

Both HITS and the third-phase of private FM radio is likely to see investments upwards of Rs 2,000 crore (Rs 20 billion) once the policy initiatives are made available, said a media consultant who advises some of the leading media companies.

Large cable operators and distributors have been waiting for the policy.

According to sources, the files of both HITS and FM radio's third-phase expansion have been pending approval for 8-10 months, after the final recommendations were made by the Telecom Regulatory Authority of India late last year, said a senior I&B official.

The HITS policy will lay the roadmap of the licensing conditions, minimum eligibility of the participants, minimum net-worth criteria and the licence fees to be paid by the operators among other issues.

According to Trai, HITS is the fastest and the most cost-effective solution towards the digitalisation of the current analogue cable distribution system in the country. Industry experts said that because of the current copper wire-based analogue cable distribution system, not more than 60-65 cable channels can be carried by the last mile cable operator.

"HITS will use the satellite to cover the larger geographical areas, while the last mile connectivity will be done through fibre-optic network and the installation of a set-top box at the customers premises. The quality of cable television reception will also go up drastically," said an expert on cable and broadcasting issues.

Trai has also recommended allowing up to 74 per cent foreign investments in the HITS operation against the existing 49 per cent foreign investments limit for the cable sector.

"HITS will be a low capex (capital expenditure)-high opex (operational expenditure) model. However, the consumers will pay for a quality cable viewing experience that HITS will provide. Once the I&B ministry lays down the ground rules for HITS operations, the sector will see a lot of activities including big investments," says a senior executive of a leading cable company who are looking at opting for HITS licence.

While only one HITS licence has been given to Essel Group's cable arm WWIL, other cable firms, including Digicable, DEN, Hathway, InCable, are also said to be keen on becoming a part of HITS operations.

The expansion of private FM radio sector in the third-phase is likely to offer at least 500 FM stations across districts and smaller towns.

Currently, around 240 private FM radio stations are already operational and the government earned around Rs 1,800 crore (Rs 18 billion) from auctioning of FM licences in two phases - FM phase-I in 2000-01 and FM phase-II in 2005-06.

Ashish Sinha in New Delhi
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