INDIA: Govt notifies 20 percent FDI in FM radio

Government to permit foreign investment in FM radio sector

Times of India

Friday, November 18, 2005

 

New Delhi --- The government on Thursday notified 20% FDI in FM radio, weeks after inviting bids for the second phase of expansion. “The government has now decided to permit foreign investment, including FDI, NRI and PIO investments up to 20% equity for FM radio’s broadcasting services, subject to such terms and conditions as specified from time to time by the ministry of information and broadcasting,” a statement from the department of industrial policy and promotion said here.

Till now, foreign investment was permitted in terrestrial broadcasting up to 20% under the portfolio investment schemes under Foreign Exchange Management (transfer or issue of security by a person resident outside India) Regulations, ’00, and FDI was not permitted by foreign entities. Over 100 applications have been made to the government, seeking entry to the second phase of private FM radio service.

Even as the government allowed FDI in the sector and decided on a revenue share regime earlier this year, it decided to continue the ban on news and current affairs. The first phase had proved to be disastrous for the growth of FM radio sector, where of the 108 frequencies put on bid, only 21 were operational. Two among the 21 have already given notice to close down. High licence fee was among the major reasons for this poor start.

Date Posted: 11/18/2005