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Bharti’s DTH License Might Get Suspended
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Following a non-compliance issue with the foreign direct investment (FDI) norms, the Government may suspend Bharti Telemedia’s DTH license, reports Business Standard. Bharti has been testing its DTH facility in Gurgaon for some time. Bharti uses MPEG-4 technology for compression which was technically superior to the existing rivals’ MPEG-2 technology.
Bharti Telemedia has two investment companies, Bharti Airtel, which holds 40% and Bharti Enterprise, which holds 60%. Now, Bharti Airtel has a foreign investment of 21.64%. The norms for DTH license claim that any foreign investment, direct or indirect, in a company offering DTH service, will have to take approval from FIPB (Foreign Investment Approval Board).
In its last month’s notice to Bharti, the Information and Broadcasting (I&B) ministry had also pointed out that Bharti Airtel also holds the license for cable TV operator. And the DTH norms clearly state that no broadcasting company, OR cable TV operator may hold more than 20% in a DTH company through direct or indirect investment. And Bharti Airtel holds 40%.
In response, a Bharti spokesperson, said:
“We are in complete compliance of all necessary regulatory guidelines including FDI and the foreign equity component as laid down in DTH license conditions and requirements.
A letter initiating the process of suspension of the license had already been moved. After the suspension, Bharti had to take an approval from FIPB, following which their license will be restored.
The DTH market is heating up. Apart from Bharti, Reliance is also foraying into DTH game. With Bharti facing a roadblock now, it will be interesting to see how the other players time their releases.
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