The Indian Techonomist: bulletin

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Indian government may rule out foreign broadcasters

December 18: "Foreign media tries back door" screamed headlines in New Delhi's normally sober business dailies last week. Following the headlines were a stream of articles over the next several days, on the "problem" of the entry of foreign media into India - particularly broadcasting - and what the government could do about it: legislate, perhaps?

All India Radio (AIR), which like Doordarshan TV is a government monopoly, has been issuing franchises for FM radio airspace for the past couple of years to private broadcasters. Last week it surfaced that in the latest auction for franchises, two bidders, TNE Asia and UDD Systems, bid the highest (about $800 per hour of airtime). They are both believed to be indirectly controlled by Rupert Murdoch's News Corp.

Mr Murdoch was already in trouble in India. The ultimate symbol of foreign media, News Corp was granted permission by India's Foreign Investment Promotion Board (FIPB) to start a wholly-owned Indian subsidiary last month. This company, to be called INDCO, would invest in programming and cable networks. However, earlier this month, Minister for Information and Broadcasting C M Ibrahim objected, and the venture is once again delayed - all though another News Corp subsidiary for programming, cleared in August, is going ahead. In this context, rumours about News Corp control of the FM franchisees naturally led to an outcry over a "back door" entry.

India has to open up its huge media market quickly; Indians love TV, yet the Bombay slum-dwellers with no proper sewage but dish antennas clearly don't care for Doordarshan. At the moment, the Indian cable business is like American Internet Service Providers - totally disorganised and unregulated. Some 50,000 cable networks will rake in about $1 billion in subscriber revenues this year, but none of that goes to the satellite channels themselves, who are forced by current Indian law to broadcast from abroad - even if owned and operated by Indians.

Till now a new law was needed to open up the market - and revenue streams, such as Direct-to-Home (DTH) subscriptions. After last week's Murdoch-filled headlines, MPs (members of parliament) want the new law to control foreigners. The government has been sluggish about finalising legislation cutting down regulations - despite a Supreme Court ruling egging it on - but now that any new law could include new restrictions against foreigners, it appears more keen on getting something done.

The government is now thinking of issuing an order - perhaps as early as next week - allowing limited private broadcasting, thereby ending the monopoly of AIR and Doordarshan, but imposing further controls on foreign ownership. This order will be a stop-gap measure until comprehensive legislation can pass in Parliament. Some of the ideas the government has, such as issuing franchises to DTH operators, may be unworkable, as they would probably go against last year's Supreme Court ruling granting all Indians what is in effect a right to broadcast, natural resources such as frequencies permitting.

In any case, Indians don't let inconvenient rules get in their way: when cable TV was illegal, it was growing at 50% a year.