While conditional access system continues to remain in disarray, the first direct-to-home television service in the country is likely to take off by October 1 with a Zee promoted company signing its license agreement with the government on Friday.

ASC Enterprises has submitted the bank guarantee of Rs 40 crore (Rs 400 million) and got the license to go ahead with its DTH services, information and broadcasting ministry sources said.

The company, which got the Letter of Intent for its DTH proposal in July end, has already paid Rs 10 crore (Rs 100 million) as refundable entry fee to the ministry.

DTH, an upmarket service, which can beam as many as 200 channels directly to the subscriber through Ku band without passing through an intermediary such as a cable operator, got the Cabinet nod nearly three years ago.

Though it is not yet clear how many channels would be beamed through ASC's DTH, it would have to conform to the to the programme code that applies to all cable TV services.

Players in the DTH race have given varying figures for set-top boxes and subscription to the government, with Zee claiming it will offer set-top boxes free of cost to its consumers and a monthly subscription of Rs 150 and Star quoting around Rs 7,500-8,000 for set-top boxes and around Rs 700-800 monthly charges.

As per the guidelines issued by the government in January 2001, the foreign equity holding including FDI, non-resident Indians, overseas corporate bodies and FII investment should not exceed 49 per cent. Foreign direct investment was capped at 20 per cent.

Broadcasting companies or cable network companies are not eligible to collectively own more than 20 per cent of the total equity of the applicant company, which itself must not have over 20 per cent equity share in a broadcasting or cable network company.

Management control of the applicant company must rest with the Indian partner, with majority representatives on the board and the chief executive being a resident Indian.

The licensee shall pay an annual fee equivalent to 10 per cent of its gross revenue as reflected in the audited accounts in the company for that particular financial year.

The license will be valid for 10 years from the date of issue.