Broadcast law allows foreign ownership<\/p>\n
Dow Jones, Jakarta<\/p>\n
Indonesia's parliament Thursday passed a new broadcasting law
\nthat allows foreign investors to directly hold a maximum 20
\npercent stake in local television and multimedia companies.<\/p>\n
The law also sets up a commission which will regulate the
\nthousands of broadcasters that have sprung up since pro-democracy
\nriots led to the downfall of former dictator Suharto in 1998.<\/p>\n
Private television stations are worried by an article that
\nplans to allow only state-owned Televisi Republik Indonesia, or
\nTVRI, to operate nationwide starting in three years.<\/p>\n
Thousands of workers from private television companies
\ndemonstrated against the law outside parliament Thursday,
\neyewitnesses said.<\/p>\n
The government plans to define the new law further in the
\ncoming months, Communication Minister Syamsul Muarif told
\nreporters outside Parliament.<\/p>\n
\"To direct and guide the implementation of the law, the
\ngovernment will issue a decree at a later date,\" Muarif said.<\/p>\n
But one thing is clear: Indonesia is hoping the new law will
\nattract foreign investors to inject capital into the sector.<\/p>\n
Until now only a few foreign companies have invested in
\nIndonesian broadcasters, using local joint ventures to get around
\ncurrent rules which ban overseas ownership of local companies.<\/p>\n
Australian company STW Communications owns a stake in a
\ncompany with a local partner, which in turn holds a 40 percent
\nstake in Surya Citra Media, the owner of private television
\nstation SCTV. Some Indonesian Internet companies also have
\nforeign partners.<\/p>\n
Currently, there are nine private television companies that
\nbroadcast nationally.<\/p>\n
Of the nine, Surya Citra Media and PT Indosiar Visual Mandiri
\nare listed on the Jakarta Stock Exchange. Rajawali Citra Televisi
\nIndonesia, or RCTI, the country's most popular television station
\nin terms of viewer numbers, is owned by listed diversified
\nholding company PT Bimantara Citra.<\/p>\n
Analysts expect the enactment of the law will affect sentiment
\nfor shares of Surya Citra Media and Indosiar.<\/p>\n
Ni Made Muliartini, an analyst with Samuel Securities, said
\nany limitation to areas of coverage could hurt revenues from
\nadvertisement.<\/p>",
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