Star-Tata DTH venture finally cleared

In a move that would spur competition in the direct-to-home arena, the government on Tuesday said it had cleared the applications of Star-Tata combine as well as that of Kalanidhi Maran's Sun TV.

"The applications conform to the stipulated guidelines and the Letter of Intent will be issued in a day or two," S K Arora, who on Tuesday took over as the new information and broadcasting secretary, told reporters.

The Rs 1,600 crore (Rs 16 billion) Star-Tata venture had particularly faced hurdles, as the application kept shuttling between various ministries for well over a year.

The company affairs ministry had expressed reservation over the proposal, raising doubts over the shareholder agreement and the management structure, which was said to be loaded in favour of the minority shareholder Star.

The Tatas hold 80 per cent in Space TV while the Rupert Murdoch-controlled Star has the rest 20 per cent. Both had re-worked the agreement after the objections were raised and the issue was even raised by Murdoch when he met the prime minister and I&B Minister S Jaipal Reddy earlier this year.

Sun TV's proposal had also faced some problems at the ministry level, though it finally received a go-ahead.

With the addition of Sun and Space TV, there would be a total of four players in the DTH segment.

While Subhash Chandra-promoted 'Dish TV' was the first player to enter the segment in October 2003, public broadcaster Prasar Bharati launched its free-to-air platform 'DD Direct+' late last year.

Dish TV, however, is yet to get the feed from Star and Sony, even as the Interconnect Regulations call for unlimited sharing of content on a non-discriminatory basis. With Star launching its own services, it is expected that the problem of sharing of content will be sorted out.

Currently, Dish TV is making forays into the urban market after starting with rural areas. It claims to have about 2,00,000 subscribers while Prasar Bharati boasts of over two million subscribers.