13nov09
The cabinet yesterday approved a proposal to issue policy guidelines for HITS (Headend-in-the-Sky) operators allowing the use of 'C' and 'Ku-band' resrved hitherto for DTH. The new policy allows HITS operators to uplink signals only from India. This is expected to speed up digitalization in CAS areas, though it would cost around Rs 100-120 cr for capital expansion to roll this out.
Govt also raised the cap on FDI in the sector to 74% (from existing 49% for cable TV operators) out of which, 49% is through automatic route and the rest is through FIPB. FDI caps for all broadcast sectors would be reviewed soon.
- The policy does not make it mandatory for cable operators to obtain signals only from the HITS network. It is only another delivery platform being provided. Hence, it may not have the complete impact in addressing the cable operator’s monopoly, though consumer dependence on cable operators will reduce further.
- Though the operators are not permitted to provide signals directly to subscribers, the policy suggests that if the HITS operator is also an MSO/cable operator, he can do so through his distribution network.
- In a bid to avoid vertical integration and promote competition, the cross media holding restriction of 20% of total paid up equity has been prescribed for various segment of broadcasting services.
- The digitalisation would help in cutting operational costs for WWIL. WWIL stock responded positively and was locked up at 20% upper circuit at Rs 20.40 on 12nov09 and was trading up another 9-10% 13nov09 morning. WWIL’s services will be operational from today, since it has already set up the infrastructure and made the capital investment. It will get 3 months to restructure and to adhere to the new guidelines.
- Presenly, only WWIL and Noida Software Technology Park Ltd have permission to offer HITS service.
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