Indian ban delays launch of News Corp's DTH service

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NEW DELHI -- Direct-to-home television broadcasting has been banned in India until a new broadcast law is approved by Parliament, the Ministry of Communications announced last week. The ban mostly will affect the fortunes of Rupert Murdoch's News Corp., which was slated to extend its Asiawide DTH service to India.

The media giant has invested millions of dollars in opening local offices, recruiting executives, installing equipment and it even acquired a license to pick up the KU band frequency, which enables DTH transmission.

Indian Sky Broadcasting, as its New Delhi- based DTH project for the subcontinent was named, now will have to wait until parliament approves a new broadcasting bill that seeks to regulate the industry.

The country currently boasts over 50 channels since the industry developed in 1990 in the wake of Turner Broadcasting-owned CNN International's live coverage of the Persian Gulf War. Television in 1996 accounted for 35% of the total ad spend in India and will rise to 39% next year, according to Carat Media Services India.

Key clauses in the bill written by the center- left United Front government are a 49% limit on foreign investment in channels beaming to India, a 20% ceiling on crossholdings among different media, tough censorship provisions and a new industry regulator, the Broadcast Authority of India.

The operation of DTH services via licenses, repatriation of advertising revenues to overseas headquarters and the possibility of allowing private channels to uplink from Indian soil are other issues under scrutiny.

The Star TV Network, MTV Networks, Turner International, General Electric Co.'s NBC and CNBC, Sony Entertainment Television and Discovery Communications are among many foreign-owned broadcasters chafing under the proposed investment restrictions and possible curbs on ad revenues. Some even threaten a pullout.

Indian-owned broadcasters like the Hinduja Group-owned IndusInd Media and Communications in Bombay, on the other hand, are unhappy about the planned impositions on media crossholdings. A senior executive said the marketer will go to court if asked to relinquish any of its interests such as cable, satellite channels and print.

Besides News Corp., keen to enter the DTH field in India are Zee Network promoter Subhash Chandra Goel, Bombay-based Modi Group in conjunction with Long Beach, Calif.-based DirecTV and IndusInd, which is negotiating for a joint venture with GE.

Copyright July 1997, Crain Communications Inc.

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