HITS Operator: 7 Eligibility Criteria

A HITS Operator is an downlinking and distribution entity that performs the following specific functions.

1. Downlinking television programs from the satellite in C band and KU Band at a central facility.
2. Encrypting the programs and uplinking them again to the satellite.
3. Downlinking the encrypted programs at the cable head- end.
4. Trans modulating the programs and delivering them to the subscribers.

To the unaware, a Headend-in-the-Sky Operator (HITS Operator) provides programs to the local cable operators who in turn provide them to their subscribers.

To become a HITS Operator in India, one needs to obtain the certificate of registration from Ministry of Information and Broadcasting.

To obtain said permission, the applicant has to apply online via the Broadcast-Sewa portal.

However, the Ministry can’t allow just anyone to apply for the license.

Therefore, to obtain the right to file the application to become a HITS operator, you need to adhere to a specific eligibility criteria. Read Other Useful Content:  Packer License

Through this blog, you’ll know about the requirements you need to fulfil before you get the right to file the application to operate a Headend-in-the-sky.

The applicant must be an incorporated entity

The Ministry of Information and Broadcasting does not entertain any application from individuals. Thus, in order to obtain the right to operate a Headend-in-the-sky,  you must first incorporate your company under Companies Act, 1956.

The applicant must meet the net worth requirement

The Company’s net worth must be at least INR 10 Crore. It’s calculation should be done in accordance with the procedure specified by the Ministry of Information and Broadcasting. As for its proof,  it’s certificate should be certified by a statutory auditor. Trust Registration

Foreign investment shouldn’t exceed 74%

After putting a lot of thought into the matter of allowing foreign investments in India’s major service sectors, the government of India has decided that foreign investment in a HITS Operator company shouldn’t be more than 74%. Throughout the lifecycle of the business, the foreign investment should remain at this percentage. To prove as such, the applicant has to yearly certify that the foreign investment within the company is at this ceiling of 74%.

Disclose all the signed agreements

The applicant has to disclose all the agreements he has signed pertaining to his business before applying for the license. Those agreements include the following:

1. Shareholder’s agreement.
2. Loan agreements, and
3. Other agreements pertaining to the object of the company which is to act as HITS operator.

FIFP approval required for FDI more than 49%

Like specified in the previous point, the applicant is allowed to have foreign equity in the company. However, the FDI – Foreign Direct Investment – part of that investment can only follow the automatic route if it’s up to 49%. If the applicant’s requirement for FDI goes beyond that, he has to obtain the FIFP approval.

Broadcasting company can own the shares of a HITS operator

Broadcasting company or a DTH Operator company is allowed to own the shares of a HITS operator. However, these entities are not allowed to collectively hold more than 20% of the total paid up equity of the HITS operator company. Likewise, a HITS operator can only hold up to 20% of the total paid up equity of a broadcasting company and/or a DTH operator company. RNI Registration

Conclusion

Only a company can file the application to become a HITS Operator. That company should meet the Foreign Investment Criteria, must fully disclose all the agreements it has signed, and must adhere to the prescribed criteria when it comes to owning or issuing the shares of or to the broadcasting or a DTH Operator company.

If you meet the eligibility criteria, you can start filing the application right away.

In this blog, we have specified the Eligibility Criteria to become a HITS Operator. For further details, you can consult with our MIB consultants.