Phase 3 FM auction gets lukewarm response

As predicted by industry insiders, many national station owners, including RBNL, Jagaran Prakashan and HT Media, have stayed away from the auction

As predicted by many in the industry, the second batch of Phase 3 FM radio auctions have seen fewer applications when compared to batch 1 last year. According to the applicants' ownership details released by the Ministry of Information and Broadcasting on August 16, the second batch has got 14 eligible applicants, compared to 28 in batch 1. What is more significant is that national players like DB Corp (My FM), HT Media (Fever FM), Reliance Broadcast Network (Big FM) and Jagran Prakashan (Radio City) are missing from the list of applicants.

The first batch auction, that took place around this time last year, brought in close to Rs 1,160 crore to the government. The highest spenders were Prashant Panday-led ENIL (Entertainment Network India), the company that runs FM stations across the country under the brand Radio Mirchi and HT Media.

Both spent close to Rs 340 crore, picking frequencies in metros and mini metros. HT Media picked up the most expensive frequency at Rs 169.16 crore for the lone one available in Delhi and spent Rs 122.81 crore for one of the two frequencies available in Mumbai. The other successful bid came from Digital Radio (Mumbai) Broadcasting (also for the same amount). ENIL forked out Rs 109.25 crore for the sole frequency in Bengaluru. While HT Media bid for a total of 10 frequencies, ENIL bought 18, including two in Hyderabad (Rs 18 crore each).

The other absentee player in this batch, RBNL, acquired 14 new stations to its existing 45 station network, focusing on key cities such as Pune, Nagpur, Lucknow, Patna, Varanasi and Kolhapur, among others in Batch 1. It spent Rs 117 crore on these acquisitions. Jagaran Prakashan, through its acquired entity Music Broadcast Limited, paid Rs 62.5 crore for 14 frequencies.

This batch of the auction has 266 frequencies up for grabs across 92 towns and cities. These include 227 fresh frequencies in 69 FM radio dark cities/towns, while the rest are leftover frequencies from batch 1. Many in the industry had predicted that the second batch of auctions may not find many enthusiastic participants because of the high reserve prices, lock-in period and ownership cap issues.

While the Association of Radio Operators for India (AROI) had appealed to the Ministry regarding these issues, and then again addressed its concerns when the MIB called for suggestions and queries while announcing the application process, they have not been considered and no change in the policy has been affected. As a result, many of the players have refused to participate and those who have, may have limited participation.

Panday in an earlier interaction with Business Standard had informed that while ENIL will be applying for participation in the auction, it may not be as active as it was in the first batch. E-mails sent to the Ministry of Information and Broadcasting were unanswered at the time of filing the report.