The government has capped the foreign shareholding in companies providing head-end in the sky or HITS cable distribution services at 49 per cent.

The HITS technology has been developed to distribute television channels using a satellite-based system.

"Direct or indirect foreign shareholding in the applicant company will remain less than 49 per cent and continue to be so in future," the government's guidelines say. The foreign equity cap in HITS is at par with that of the cable network companies.

These guidelines were worked out after Agrani, a Subhash Chandra-promoted company, applied for a licence to offer cable television services on the HITS platform. Agrani's proposal has been cleared.

"These guidelines were worked out after Agrani applied for a licence for HITS since we felt that the government should promote alternate ways of distributing satellite channels," said a government official.

Besides, the government has stipulated that the HITS operator should use only an Indian satellite for distributing channels in the country.

To ensure that the HITS operator does not offer direct-to-home services using the same infrastructure, the guidelines specify that only a C-band transponder should be used to distribute the channels.

Besides, to uplink the channels, the applicant company should have a teleport in India.

The guidelines also specify that the HITS operator should have all the necessary agreements with the channels, clearly laying down the terms and condition permitting the transmission of the channels.

The guidelines also prescribe that the HITS operator should make sure that the subscriber gets the free-to-air channels without a set top box.

In case the HITS operator does not find this feasible, the set top box should be provided to the consumer free of cost.

As per the norms, HITS operator shall ensure that the signals are distributed in an equitable and non-discriminatory manner.

"No independent operator will be refused a decoder if he does not want to join HITS," it says.

Apart from Agrani, companies like Hathway, Pacenet, Icara and others have also expressed interest in operating a HITS platform in the country.