HITS Operator provides to the subscribers with the facility to uplink and downlink television programme in C-Band and Ku-Band. First, all the pay channel are down linked at a central facility, then after encryption, they are uplinked back to the satellite. A cable operator uses a single satellite antenna to downlink these TV channels. Then after transmodulation, it sends them to the home of the subscribers.
As one can guess, the technological nuances to become an Headend-in-the-sky-Operator are many. Thus, the Ministry of Information and Broadcasting has specified stringent eligibility criteria for granting the permission to become a HITS Operator.
This blog discusses those in detail.
Criteria 1: The applicant should be a company
The Ministry doesn’t trust an individual to provide such a complex service. Therefore, only an applicant that’s a company registered under Companies Act, 1956 is allowed to apply for the HITS Operator License.
Criteria 2: Net worth of the company
The applicant company’s net worth must be at least INR 10 Crore. To calculate the net-worth, the applicant’s statutory auditor must follow the steps prescribed in the Performa specified for that very purpose. Read More: Startup Registration
Criteria 3: Limit to Foreign Investment
it’s imperative that the total direct and indirect foreign investment that includes portfolio and foreign direct investment into the company does not go beyond 74%.. The government of India takes note from an extant policy for the calculation of foreign direct and indirect investments. Furthermore, the applicant has to submit a report about the foreign holding of the company on an yearly basis – confirming that it conforms to the prescribed limit of 74%.
Criteria 4: Foreign Direct Investment for the Automatic route
The Ministry of Information and Broadcasting has allowed the applicant company to have foreign direct investment up to 49% through an automatic route. But if the investment goes beyond that, the applicant has to follow the prevalent FDI policy. Furthermore, the licensee must take care that the foreign holding of the applicant company does not go beyond 74%.
Criteria 5: Full disclosure of the applicant
During application filing, the applicant has to thoroughly disclose all the agreement it has entered into.They include Shareholders Agreement, Loan Agreement and other such agreements. Likewise, If there are changes within the terms of these disclosed agreements, the Ministry of Information and Broadcasting should be promptly informed within 15 days of such changes.
Criteria 6: Criteria for shares held by broadcasting and DTH companies
Broadcasting companies and the DTH licensee companies can only collectively hold the shares of the applicant company up to 20%. Also, the applicant company only has the permission to hold 20% of shares at maximum of broadcasting and DTH licensee companies.
However,, this restriction doesn’t apply for investors belonging to financial institutions and an MSO/Cable Operator Company. Read More: Section 8 Company Registration
Criteria 7: Licensee must consider both Direct and Indirect shareholding
Ministry takes into account both direct and indirect shareholding when it comes to calculating the shareholding of the applicant company. Therefore, the applicant must adhere to the shareholding criteria as per Press Note 2 of 2009 dated 13.02.09 of Department of Industrial Policy and Promotion. It is under the Ministry of Commerce and Industry for Determination of Indirect Foreign Investment.
Conclusion
Becoming an HITS Operator allows you become a service provider to the local cable and MSO operators. Thus, the MiB’s eligibility criteria for the license to become HITS Operator in India, although quite stringent, is justified.
So, if you want to take one step ahead and start this unique and vast business, contact our Broadcasting experts.
Start the application filing process today. Related Content: Model Approval In India
What is the eligibility criteria to become a HITS Operator in India? In this article, we discuss the eligibility specifics of a HITS Operator License.
