New Delhi, Nov 12 : The cabinet Thursday approved a proposal to issue policy guidelines for Headend-in-the-Sky operators, and raised the cap on foreign direct investment (FDI) in the sector to 74 percent.

Also known as HITS, Headend-in-the-Sky is a digital satellite service that provides cable channels to cable television operations.

"The essential difference between a HITS operator and a multi-system operator (MSO) is that the former transmits the bundle of channels to the cable operators using a satellite, whereas the latter does the same through cable," said a government press release.

According to Information and Broadcasting Minister Ambika Soni, the policy does not make it compulsory for cable operators to obtain signals only from the HITS network. "We are only providing another delivery platform," she said.

The minister said the foreign investment cap has been put at 74 percent "at the recommendation of TRAI (Telecom Regulatory Authority of India)". Currently, it is 49 percent.

"Out of the 74 percent, 49 percent is through automatic route and the rest is through FIPB," Soni said.

According to her, the move would encourage digitalisation of cable services even in smaller towns and regions. "With the Commonwealth Games coming up (in 2010), it will allow better viewing," she said.

This would an enabling policy, which will encourage digitalisation of cable network, Soni noted.

"The cross-media holding restriction of 20 percent of total paid-up equity has been prescribed for various segment of broadcasting services. These restrictions have been provided to avoid vertical integration and to promote competition," she added.(IANS)