Indian cable companies may lose close to $200 million (about Rs 800 crore) in foreign investments this year as companies like Macquarie, Carlyle, Providence and Liberty Global, which invest in media companies worldwide, have become wary due to a shaky regulatory environment.

According to industry sources, a significant amount of foreign investments in some of the cable distribution companies was expected towards the end of this year.

"It's unlikely now that any investment will come as these were linked to the extension of conditional access system in Delhi, Mumbai and Kolkata and later in 55 other cities," an industry source aware of the proposed investments told Business Standard.

Recently, a senior executive from the $6.5-billion Liberty Global had said that the company would wait for a while before making active investments in Indian cable firms. Liberty Global has made significant investments in the cable and broadband business in Europe, the US and the Asia-Pacific and has been looking at opportunities to invest in local cable companies.

International investors like Macquarie, Carlyle and Providence have been making sustained investments in telecommunications, cable and broadband businesses across Australia, South Asia, and the US.

As reported earlier, the extension of CAS in the three metros is now delayed by six to eight months with the government studying the impact of the syatem in the select areas of these cities. This has made foreign players put their investment plans in India on hold.

The Multi System Operators Alliance, along with the Telecom Regulatory Authority of India, have given positive feedback for the extension of CAS but the Ministry of Information and Broadcasting has not given any timeframe for extension or the next phase rollout of CAS.

"This has left foreign investors worried about their investments," said a senior executive of a cable company.

According to Media Partners Asia, an independent international media research agency, while the number of pay-TV subscribers has risen from 1.92 million in 2006 to 4 million by the end of August, a bulk of these numbers are because of Direct-to-Home services.

The MPA report states that CAS remains riddled with a number of logistic and commercial barriers, the most serious being the lack of last-mile control at the MSO level and lack of readiness at the local cable operator level.

"International investors have become far more cautious on investments in the cable sector in India because of excessive valuations and regulatory concerns," the MPA report says.

The report says the key issues for private equity groups include lack of national-level MSOs in the market, discomfort about the absence of a cable franchising or licensing framework in India, intrusion into the pricing and distribution of cable TV services and uncertainty in both these areas.