Govt hopes to earn Rs 15 bn from Phase III auctions

NEW DELHI: The government hopes to earn over Rs 15 billion from the auction of 839 FM radio channels in 294 cities.

Information and Broadcasting Ministry sources told indiantelevison.com that it will hold ascending e-auction as recommended by the Group of Ministers and followed in the case of 3G and BWA by the Telecom Department.

The Telecom Regulatory Authority of India (TRAI) has recommended reduction in the minimum channel spacing from 800 KHz to 400 KHz within a licence service area in FM radio sector in India. The recommendation is under ?active consideration? of the Ministry, the sources said.

Under the Phase III Policy, the permission for the channels would be granted on the basis of non-refundable one-time entry fee, that is, the successful bid amount to be arrived at through an ascending e-auction process mutatis mutandis as recommended by the GoM. The cost would be determined through price discovery during the e-auction process.

The e-auction, expected to begin early next year, may take another two or three years in view of the large number of stations.

The sources said apart from the problems that may arise because of the first-time e-auction for which cabinet permission will be sought in advance to avoid delays, issues such as charging of migration fee from existing permission holders, and specific departures in the Requests for Proposals (RFP) had not been taken into account when the Cabinet had approved the Phase III proposals on 7 July last year.

The Information and Broadcasting Ministry has prepared a note which has been circulated to the concerned ministries/departments for their views, before it is put up before the Union Cabinet in the next few weeks.

Meanwhile, the Ministry is expected to call for tenders for e-auction later this month. The pre-qualification for the bidders is expected to be completed in another two months, following which the qualified companies will be allowed to participate in the e-auction for FM Phase III.

FM Phase-III Policy will extend FM radio services to about 227 new cities, in addition to the present 86 cities. Among the four metros, only Kolkata is not getting any new FM channel. While Mumbai will get two, Delhi and Chennai will get one each.

Under Phase-II currently in existence, 245 FM channels are operational covering 86 cities, each with a population of over 300,000 or more.