Telecoms operators who wish to provide television over Internet in India will have to pay between 6 percent and 10 percent of their adjusted gross revenue as licence fees, depending on the telecom zone they operate in, the telecoms regulator recommended on Friday.

Telecoms firms, cable operators and some Internet service providers are permitted to provide Internet protocol television (IPTV) in India. Top telecoms firms like Bharti Airtel Ltd (BRTI.BO: Quote, Profile, Research) and Reliance Communications Ltd (RLCM.BO: Quote, Profile, Research) have outlined plans for such services.

The Telecom Regulatory Authority of India (TRAI) did not recommend any changes in the existing cap on foreign investment for providers. Indian rules allow up to 74 percent of foreign holdings in telecoms firms and a maximum of 49 percent in cable operators.

Broadcasters should be permitted to provide television signals to all distributors of the channels, TRAI said. Current regulations say broadcasters can provide equipment to decode the signals only to cable operators or operators of multiple cable television systems.

Telecoms firms will be allowed to transmit only those news television channels that have been approved by the ministry for broadcasting, the regulator recommended. They must transmit television channels in the same form as allowed by the government for up-linking or down-linking, it added.

The firms must adhere to the country's programme and advertisement codes if they transmit any content other then television channels, TRAI said.

Analysts see IPTV as a promising technology, but say its growth in India will be held back due to the low broadband penetration in the country. Just 0.24 percent of India's population had broadband connections in September 2007, the latest figures from the regulator showed.

Without a mass-market broadband usage in place, the Indian IPTV subscriber base will struggle to exceed 1 million in the next four years Neha Gupta, senior research analyst with Gartner said in a report in November. (Reporting by C. Jacob Kuncheria; editing by Sue Thomas)