Media firms await India's decision on foreign ownership

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BOMBAY -- The blatant opposition of India's new right-wing government to foreign participation in local print and television media is jeopardizing the fu ture of U.S., Asian and European broad casters operating in the country.

Prime Minister Atal Behari Vajpayee, whose 14-party Hindu nationalist coali tion formed a new government March 19, is categorical in his opposition to international presence in print media but mildly tolerant of minor equity holdings by foreign companies in local TV broadcasters.

"I am opposed to foreign participation in print media," Mr. Vajpayee told an audience in New Delhi at the announcement of his government's National Agenda for Governance, a common manifesto for the con servative administration led by the hawkish Bharatiya Janata Party.

Ownership of print media in India has been restricted to local hands since 1955 under the then Indian National Congress government. Mr. Vajpayee's government will not lift that ban, affecting the chances of U.K. media giant Pearson Group's Financial Times newspaper for a local edition. Pearson has been denied permission since the early 1990s, when it first applied for government approval.

But the Hindu right-wingers' opposition to foreign-owned TV networks beaming to Indian homes may convince many broadcasters to leave rather than dilute their 100% or majority shareholdings in the Indian subsid iaries whose broadcast content they argue is proprietary and cannot be shared.

"We will also enact the Broadcasting Bill to regulate private broadcasting and to pro tect Indian interests," says the coalition's manifesto. "We will restrict foreign equity holding in private television broadcasting to 20% and prevent cross-holding to avoid emergence of monopolies in the media."

Chief among those whose prospects will be affected are Turner International (India), MTV India, Sony Entertainment Television (India), the STAR TV Network, Zee Network, Discovery Communications and ESPN. Rupert Murdoch's News Corp., which wholly owns STAR and half of Zee, will be the biggest loser, despite intense lobbying against such moves.

The provision on media cross-holdings will upset both Bombay-based Bennett, Cole man & Co. and New Delhi-based Hindustan Times Group, both essentially print media owners with interests in TV and, in Bennett's case, also radio. Bennett, through its flag ship, The Times of India broadsheet, is India's largest newspaper publisher.

The previous incumbent center-left United Front government sought to rein in previous liberal media initiatives and instituted a joint parliamentary committee on broadcasting that suggested a reduction in foreign-owned equity in TV networks incorporated in India to minority status.

The new government's intentions on broad casting have yet to be fleshed out and are still unclear, claim senior TV executives whose networks are at risk.

"There's very little information to react upon," says Bhaskar Pant, New Delhi-based president of Turner's Indian operations. "It really is a blanket statement about private broadcasting. It's not talking of satellite broadcasting, or Indian or for eign channels. I think it needs to be de fined."

According to existing regulations, only state-run broadcaster Doordarshan can up link from Indian soil for broadcasts. Both privately run Indian and foreign channels currently reach India's 18.6 million cabled homes through satellite via uplinks either from Singapore, Hong Kong or other parts of Asia.

"We all will respect the law of the land," says Sunil Lulla, general manager of MTV India in Bombay. "We also believe that there will be a debate on [the joint parliamentary committee] recommendations and that the TV industry will be given due chance to interact."

Like Turner, Mr. Lulla's MTV India is incorporated in India as a wholly owned subsidiary of its parent. Both Turner's Mr. Pant and Mr. Lulla refuse to speculate on their broadcasters' future if they are forced to relinquish control to Indian partners.

"At the end of the day, we are a busi ness," Mr. Lulla says. "We provide [local] employment and culturally relevant enter tainment. We believe that [MTV India] is relevant to the culture and the country. I am sure the government will respect that."

Copyright March 1998, Crain Communications Inc.

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