Wednesday, April 15, 2009

I&B Ministry grants 3 years to World Space for new licensing

Popular satellite radio service provider World Space India has sought five-year time to migrate into the new licensing regime once it is finalised.

World Space, in a official communiqué to the Information and Broadcasting Ministry, said that the company would divest 26 per cent equity in favour of Indian equity investors, within a five-year timeframe. This will be in consonance with the new licensing regime proposed by the government.

However, the government has offered World Space India, a three-year deadline to migrate into the new licensing regime. The company is a wholly owned subsidiary of World Space Asia based in Singapore.

At present, World Space provides 34 radio channels in India that include BBC World and London-based WRN news channels. The government foresees entry of topnotch foreign players into the virgin satellite radio services market once the licensing regime being considered by union cabinet is put in place.

World Space was launched with the intention of providing digital satellite radio primarily in the emerging markets of Asia and Africa. The radio services are provided on a subscription basis and the radio services are uninterrupted because it has no spots. The only source of income is subscriptions.

Already, US-based Sirius XM Radio, the largest satellite radio player internationally, has evinced keen interest in making a foray into Indian satellite radio market. Sirius that has operations in North America, Canada and Alaska had acquired XM in July 2008.

The satellite radio networks will allow subscribers access to programmes relayed worldwide via fixed, portable or vehicular radio sets. Opening up satellite radio to new domestic and foreign players will widen choice of programmes already the subscribers have through AM & FM radio broadcast of All India Radio (AIR).

As per draft cabinet note circulated by Information and Broadcasting Ministry, the 74 per cent FDI cap will be set for Satellite radio operators, on par with those on other platform services like teleports and Direct to Home (DTH).

The bidding for licenses to enter the satellite radio space may be held once the current Lok Sabha elections are completed, an official said on condition of anonymity. The government also foresees a chunk of FM radio broadcasters offering satellite services, as most of the licence norms would be similar between the two.

FM radio service providers cover 35.50 per cent population and a geographical area of 24.41 per cent. About 245 FM channels are operational in the country across 87 cities. As per policy formulation under consideration, FM services may be extended to another 210 cities.

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