Govt to limit foreign ownership in TV stations

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.