Govt to limit foreign ownership in TV stations

Rendi A. Witular, The Jakarta Post, Jakarta

The government plans to ensure that foreign investors hold no more than a 20 percent direct or indirect stake in any local television station, starting by verifying the existing ownership of the stations.

Broadcasters already indirectly controlled by foreign investors will be required gradually to divest their foreign- owned stakes to local companies, Minister of Communications and Information Sofyan Djalil told The Jakarta Post recently.

"We will check the ownership of local TV stations to ensure that foreign ownership does not exceed 20 percent at the stations ... this is to guarantee our media is not influenced by foreigners," he said.

Sofyan said the first station to be checked would be ANTV, which is run by PT Cakrawala Andalas Televisi. This comes after Rupert Murdoch's Hong Kong-based satellite and cable operator Star TV bought a 20 percent stake in the station for a reported US$20 million.

The communications ministry received an official notice from ANTV over the purchase and will make further checks, he said.

Cakrawala spokeswoman Soraya Perucha said Star TV had no intention of purchasing more than a 20 percent stake in the company, at present or in the future, and violating the law limiting foreign ownership of local television stations.

"Star TV and ANTV have no intention of breaching the law. Star TV will have a maximum 20 percent stake, as required by the law. We welcome the communications ministry's plan to verify our ownership," she said.

Under the law, foreign companies can control a maximum of 20 percent in any local media company.

However, there have been reports of foreign investors indirectly controlling stakes that exceed 20 percent in some local media companies. The local companies reportedly set up holding companies and then sell shares in the holding companies to foreign investors, giving these investors indirect control over the companies.

Sofyan said the ministry would require local TV stations that were controlled indirectly by foreign investors to divest the foreign-owned stakes to local firms within five years.

"We will issue a regulation that requires all companies running a TV network to start selling stakes currently controlled indirectly by foreign firms to local companies within five years or face sanctions," he said.

He did not disclose the sanctions, saying the ministry was still working on them.

However, TV stations require the involvement of foreign investors for financial support and expertise in the industry.

Indonesia, Southeast Asia's largest economy, has 11 television stations with national coverage and dozens of provincial broadcasters.

Many of the stations are struggling to compete in the crowded market. Most of the stations are expecting lower profits this year due to the high cost of producing quality TV programs in an effort to maintain audience share.