Trai Says No To Broadcasters Controlling Distribution Biz

[savramesh 37]

Telecom regulator TRAI has recommended that broadcasters should not have any control in distribution operations and vice versa to avoid monopoly by a particular player.

"Any entity with more than 20 per cent stake in a broadcasting company cannot own more than 20 per cent in a distributor and vice versa," Trai, which also regulates the broadcast industry, said in its recommendations to the Ministry of Information and Broadcasting.

Distributors will include multi-system operators (MSO), DTH, Cable, Mobile TV and HITS. There are three broadcasters - Zee, Star and SunTV - who have DTH business.

The telecom and broadcast regulator has said that the broadcasters, who have control in distribution operations, will get three years for restructuring their holdings.

A TRAI official associated with the recommendations said that the idea is to lay down rules of the game for the future although none of the existing players are under the purview of the suggestions.

When contacted, A Mohan, Executive Vice President, Zee Network said 20 percent ceiling was already part of DTH license therefore it is complied with.

"As for the cable business stake, which is a new proposal by TRAI, Zee group company Wire and Wireless India (WWIL) is a listed and public limited company and is not applicable to Zee," he added.

TRAI also said that there would be no restriction on cross-ownership across telecommunications and media companies, a decision which it may review after two years.

Bharti and RCom are the two telecom companies who have DTH businesses. Mohan said this could lead to asymmetry in the industry.

However, Bharti and RCom officials did not comment on the recommendation.

Mohan further said that the government should first accept the TRAI recommendations on modernising and licensing of cable TV business in the country and that would set the standard for the players.

Star India officials said they were studying the recommendations. Star has a joint venture with Tatas in their DTH venture, TataSky, in which Star has 20 percent stake.

SunDirect TV CEO Tony Silva said the company would able to comment after going through the recommendations.

"Sun TV has no holding in SunDirect", Silva said.

Talking about limiting the number of licences to be held by a single entity, the regulator said: "The current restrictions, policies and recommendations on these are adequate for the time being."

The telecom watchdog is of the view that the current global financial crisis has impacted the Indian media industry, particularly the print media.

"In such a situation, while all the steps are being taken to help the media industry get through the situation and reduce the impact of slowdown, it is essential that none of the safeguards have an adverse impact on the sector," it said.

On consolidation in the media industry, it said there was a need to ensure that plurality and diversity of views were maintained while suggesting the Ministry of Information and Broadcasting to conduct a detailed market study and analysis for identifying and determining safeguards.

After working out required safeguards, merger and acquisition guidelines for the sector may be issued to prevent media concentration and creation of significant market power, TRAI said.

(DD-25.2)

Source: DDNews