Context: The Union Cabinet approved revised guidelines for Direct-to-Home (DTH) broadcasting services, allowing 100% foreign direct investment (FDI) as well as increasing the license period to 20 years.
Key Revised Guidelines

• The licenses will be issued for a period of 20 years, compared to 10 years at the moment.
• The license fee has been revised from 10% of gross revenue (GR) to 8% of adjusted gross revenue (AGR), which will be calculated by deduction of Goods and Services Tax (GST) from GR.
• Broadcasting firms will have to pay the license fee on quarterly basis, rather than the annual basis as of now.
• It may also enable DTH service providers to invest for more coverage leading to increased operations and higher growth and thereby enhanced and regular payment.
• DTH operators, willing to share DTH platform and transport stream of TV channels, on voluntary basis, will be allowed.
• Distributors of TV channels will be permitted to share the common hardware for their Subscriber Management System (SMS) and Conditional Access System (CAS) applications.

What is DTH?

• The Direct-To-Home (DTH) technology enables a broadcasting company to directly beam the signal to a TV set through a receiver that is installed in the house.
• There is no need for a separate cable connection.

Description

• In India, direct-to-home (DTH) Broadcasting Service refers to the distribution of multi-channel TV programmes in the K? Band by using a satellite system by providing TV signals direct to subscribers' premises.
• The K? band is the portion of the electromagnetic spectrum in the microwave range of frequencies from 12 to 18 gigahertz.
• The company beams an encrypted signal that only the set installed in the household can receive and enable viewing.

Advantages of DTH

• Does away with the cable operator giving channels of his choice with compromised quality.
• Superior quality of signals since the signal is not split through a cable.
• By choosing just the signals that one needs, it reduces monthly cable bill.

Disadvantages of DTH

• The capital cost that has to be borne initially.
• This involves setting up of a receiving apparatus at the subscriber’s end.

What is FDI?

• A foreign direct investment (FDI) is an investment made by a firm or individual in one country into business interests located in another country.
• Generally, FDI takes place when an investor establishes foreign business operations or acquires foreign business assets in a foreign company.

FDI in India

• According to the data of the Department for Promotion of Industry and Internal Trade (DPIIT) 2020, the inflows during the period stood at USD 500.12 billion.
• About 29% of the FDI came through the Mauritius route.
• It was followed by Singapore (21 per cent), the US, the Netherlands, Japan (each 7 per cent), and the UK (6 per cent).
• India received USD 144.71 billion from Mauritius and about USD 106 billion from Singapore during the period under review.
• The other big investors have been from Germany, Cyprus, France and Cayman Islands.

Advantages of FDI

• Inflow of Equipment and Technology
• Competitive advantage and Innovation
• Financial resources for expansion
• Employment generation
• Contribution to Export growth
• Improved consumer welfare through reduced cost, wider choice and improved quality.

Disadvantages of FDI

• Crowding of Local industries
• Conflict of Laws
• Loss of control
• Effect on Natural Environment
• Effect on Local Culture.