The proposal for auctioning for phase III of FM channels was given a go ahead by the government on Friday. The exchequer stands to add an estimated revenue of over Rs 550 crore from the process.
The Union Cabinet, chaired by Prime Minister Narendra Modi also approved migration (renewal) of private FM Radio licenses from Phase-II to Phase-III in 69 existing cities for 135 channels on payment of migration fee according to the Telecom Regulatory Authority of India’s (TRAI’s) recommendations. Besides, it will beget the amount realised through the migration process which is dependent on the TRAI recommended formula, where migration fee is linked with the discovery of market prices through the FM Radio Phase III auction.
“We are extremely pleased that the final sanction for the clearance of Phase III auctions has been granted by the cabinet. This paves way for the smooth conduction of the auctions and heralds a new era in the FM landscape. Cabinet giving the go ahead means that the Phase III rollout which has been delayed for more than two years can finally happen this fiscal. It is the much awaited fillip & we are all happy with the movement forward,” says Apurva Purohit, CEO, Radio City 91.1 FM.
Prashant Panday, CEO, Entertainment Networks India Limited (ENIL), the company that runs Radio Mirchi 98.3 FM agrees and adds, “The industry can now heave a sigh of relief. This is what we all were hoping for. Apart from finally putting in motion the process for the auction, the cabinet nod also means that the migrations of existing licenses will happen before the March 31 date, when they expire. While we were assured that the licenses will be extended in case of delay, the auction completion will make life easier for everyone.”
He estimates that the auction should be completed in 60 days from now. The next step will be the issuance of the Notice Inviting Applications following which, the radio companies will have a month to file the same. Along with the application, the companies will have to submit documents certifying that they have the required net worth for participating in the auctions.
Radio phase three auctions have been delayed by almost 3.5 years now. The first announcement was made in April 2012 and since then, it has been pushed back numerous times.
Companies in the sector have been keenly preparing for the auctions since some time now. Radio City, which was recently acquired by Jagaran Prakashan, will look at expanding its network from 20 stations currently to 40 stations post the auction, mainly focussing on the SEC A markets. Radio Mirchi will be looking at the process in tranches since there will be two segments of auctions. In the first segment, 56 stations will be auctioned. “We already have presence in 32 of those cities and would want to increase that presence. Additionally, we may also pick up a second frequency in some of the cities we already have presence in,” says Panday.
As of now, with the implementation of two phases of Private FM Radio -- Phase I (1999-2000) and Phase II (2005-06) -- there are 243 private FM channels in operation in 86 cities of the country, spanning 26 states and three Union Territories.
The roll out of the first batch of FM Radio Phase III auction will provide more channels to listeners with richer content in 69 existing cities, the statement said.
