Trai may raise FDI cap for FM radio

May also allow entry into news and current affairs broadcasting.

The Telecom Regulatory Authority of India (Trai) is likely to meet a long-standing demand of FM radio broadcasters by recommending an increase in the Foreign Direct Investment (FDI) limit and allowing their entry into news and current affairs to the ministry of information and broadcasting.

At present, the FDI limit for FM radio companies is 20 per cent. A senior Trai official has indicated that it could recommend an increase between 26 and 74 per cent. "The effort is to go towards 74 per cent in line with most other sectors," the official said.

The regulator is due to finalise its recommendations on the third phase of expansion of the private FM radio sector this week. Trai expects another 700 FM stations to open across 237 towns.

In the first two phases, 37 radio companies were given licences to open over 260 FM stations across 91 cities. As of now, nearly 200 FM stations are operational.

FM radio broadcasters have been petitioning to air news and current affairs to diversify their content that is largely centred on playing recorded music.

"There were proposals to allow news as a fixed time slot on the FM channels and also of sourcing news from credible sources like All India Radio, Press Trust of India and Reuters. But Trai will recommend opening up news on FM radio," the Trai official said.

The Amit Mitra committee on radio sector reforms had suggested allowing news on FM radio in 2005.

The 20 per cent FDI limit has been maintained by the government allegedly due to the sensitive nature of radio broadcasting which reaches large sections of the population instantly.

The FM radio industry, represented by the Association of Radio Operators for India (AROI), had sought an increase in the FDI cap for radio to at least 26 per cent, if not more.

Trai is also likely to recommend networking between FM radio stations across A, B, C, and D category towns. The move would help radio companies save costs by allowing them to share the radio shows of one city with the other, a practice currently prohibited under radio laws.