PM forms GoM on FM spectrum allocation

With another round of allocation for FM radio spectrum due next year, Prime Minister Manmohan Singh has constituted a Group of Ministers (GoM), to be headed by Finance Minister Pranab Mukherjee.

Advisor to the Prime Minister Sam Pitroda had also been roped in as a special invitee as the issue is highly technical in nature, government sources told Business Standard.

Home Minister P Chidambaram, Defence Minister A K Antony, Communications Minister A Raja and Information and Broadcasting Minister Ambika Soni are the other members of the committee.

An official of the finance ministry said: “As the FM sector involves installation of very costly equipment and the equipment are specific to the range of the frequency allotted to the companies, there is a tough competition among the players to get their desired spectrums. The GoM needs to address the issues like spectrum modulation.”

The government has worked out a three-year staggered auctioning of 806 FM frequencies between 2011 and 2013 under Phase III. Around 160 FM airwaves across 60 towns will be auctioned in the first year, beginning January 2011.

After auction of 3G spectrum through internet went without a controversy, the government has decided to work out modalities for the expansion of Phase III through similar clock auctions-with e-way assistance.

“The radio industry is poised for exponential growth with Phase III. We are already the largest player in the country with a 45-station penetration and would like to take radio deeper into the country,” Reliance Broadcast Network CEO Tarun Katial said.

After opening the FM radio to private players in 2000, the government has completed two phases of privatisation by 2006, but the third phase has since been delayed. In Phase II, some 338 frequencies were offered for auction.

According to a report by consultancy major PricewaterhouseCoopers, the size of the radio industry, which was Rs 900 crore in 2009, is expected to grow at 12.2 per cent compounded annual growth rate to reach Rs 1,600 crore in 2014.