Foreign holding in satellite radio companies may be capped to bring uniformity in foreign equity limit across various media sectors. The government is evaluating a proposal regarding this.
At present, there is no policy on foreign investment in satellite radio companies.
This will mean that satellite radio broadcasters operating in India may soon require an Indian majority shareholder, akin to that in FM radio, cable and direct-to-home broadcast services.
According to officials, the ministry of information and broadcasting is looking at evolving a policy on satellite radio broadcasting, with an aim to ensure that such companies operating in India are owned by Indians.
"There is a policy that prevents majority foreign shareholding in FM radio companies. It can also be applicable to satellite radio companies," said an official. Information and broadcasting ministry officials said a detailed policy regarding this sector would be formulated soon.
Government sources said such a move had been necessitated as concerns about national security had been raised by quarters including the home ministry. The security issue was the reason behind the government not allowing foreign ownership of private FM radio companies operating in the country.
At present, there is no law that governs the satellite radio sector and companies can set up fully owned shops in India.
Currently, WorldSpace India is the only satellite radio broadcaster or "satcaster" in the country offering over 40 channels across nine cities. It is a wholly owned subsidiary of the US-based, Nasdaq-listed, WorldSpace Inc.
A satellite radio uses digital satellite systems, which are capable of transmitting content in a coverage area of several million square kilometers.
A satellite radio listener can tune in to a channel no matter where he or she is, because the signal's reach is not limited by station power, unlike FM radio, which is transmitted through local stations.
The government also wants to take a look at allowing satellite radio companies to air news and current affairs programmes.
WorldSpace India currently has content tie-ups with BBC Asia, CNN International, Bloomberg and NDTV.
The satcaster saw its subscriber base in India swell to 74,574 subscribers at the end of the fourth quarter of calendar year 2005, up over 100 per cent from 35,670 at the end of the third quarter of 2005 and up nearly 800 per cent from 8,335 at the start of the year.Within the next two months, WorldSpace India is planning to roll out its services in another ten cities in India.