The government has decided to free the groups or holding companies owning FM radio channels from the current 24 per cent foreign direct investment (FDI) cap across sectors. The companies will have to register the FM channels as separate companies to avail of higher FDI ceilings for other sectors.
The Information and Broadcasting Ministry noted that for the existing FM channels registered as a separate companies the 24 per cent FDI cap would continue. The other policy initiatives are launch of FM phase-III, extending radio services to smaller towns and a new policy to regulate satellite radios.
For example, the Reliance group, which owns Big FM, would be allowed to seek 100 per cent foreign investment for its other business like telecom and entertainment except Big FM. It will have to register Big FM as a separate company, a ministry official told HT.
Under the existing licence regime, the 24 per cent FDI cap is uniformly applicable for all companies of a group, if it owns an FM radio channel. For example, the Reliance group, which owns Big FM, will be allowed to seek higher foreign investment limits for its other businesses only if it registers Big FM as a separate company.
A ministry official said that the decision to allow companies to de-merge their FM radio channels would be notified soon. The decision was taken following representation from the industry that the 24 per cent FDI cap on FM channels was preventing foreign investment in their other business ventures.
The ministry also finalised the FM phase-III policy to be announced soon. Under the policy, FM stations would be auctioned for 50 smaller towns. FM radio stations, at present, are in operation in all the metros and cities with populations of more than 10 million. With phase-III, the I&B ministry expects to increase the number of FM channels in India to 250.