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The third phase of FM Phase III radio auctions is set to begin in the first half of January next year with 20 radio players already submitting their applications.
However, e4m has learnt that leading FM players like Mirchi and Radio City are not part of the list of participants. Industry insiders suggested that compared to the last auctions the number of interested bidders is comparatively lower. In Phase II, there were 70 applicants.
As reported earlier, players have been staying away from the FM radio auctions because of steep licence fee. Stakeholders have been saying that the government's plan to expand into tier cities and towns lacks commercial feasibility. The lack of audience is the other impediment.
According to MIB’s notification, among the 20 who have applied are - A M Television Pvt Ltd, Ahalia Healthcare Limited, Clear Media India Pvt Ltd, D B Corp Ltd, Eastern Media Ltd, HT Mkdia Limited, JCL, Infra Pvt Ltd, Kal Radio Limited, Lohchab Motors Company Pvt Ltd, Madhuresh Publications Pvt Ltd, Malar Publications Ltd, Pindari Media Entertainment Pvt Ltd, Rajasthan Patrika Pvt Ltd, RLFE Pvt Ltd, Santamonica Tours & Travels Pvt Ltd, Sapphire Media Limited, Setwell Coatings India Pvt Ltd, South Asia FM Limited, The Malayala Manorama Co Pvt Ltd and The Mathrubhumi Printing & Publishing Co Ltd. While HT Media operates Fever, Sapphire Media owns Big FM, DB Corp runs My FM and Kal Radio drives Red FM.
Regional players like Malayala Manorama runs Radio Mango and Club FM is operated by Mathrubhumi. Eastern Media caters to Odisha and owns an FM channel called Radio Choklate. Similarly, Malar Publications run Hello FM in Tamil Nadu and Puducherry.
Phase I and II had more takers
In 2005, the government announced the policy for Phase-II of FM Radio Broadcasting, that resulted in offering 337 channels across 91 cities with a population of three lakhs or more. Among these channels, 284 were successfully bid upon, and after scrutiny, permissions were granted for 245 channels spanning 87 cities. In Phase-II, a total of 222 channels became operational.
The first phase of FM radio broadcasting (Phase-I) was initiated by the MIB in 1999. During this phase, private agencies were offered a total of 108 channels in 40 cities within the FM spectrum band (88 – 108 MHz).
An auction mechanism involving multiple rounds was employed to grant these permissions, and the operational licences were awarded for a duration of 10 years. Out of the 108 channels, only 37 had their bid amounts paid, and ultimately 21 channels became operational.
Reserve Prices
About 234 cities with 730 channels will be available for bidding in the coming month. Tier 2 and 3 towns like Ludhiana, Moradabad, Belgaum, Imphal and Muzzaffarnagar are also part of the list of cities under A, B, C and D categories.
According to MIB’s FM Policy guidelines, the Reserve Price for new channels in existing FM Phase-II cities shall be the highest bid price received for that city in Phase-I. In cities being taken up afresh, the reserve price shall be the highest bid price received during FM Phase-I for that category of cities in that region.
Reserve Pricing was defined by the MIB in their FM Auction rulebook, where it stated the base pricing for different states. Categorised as ‘C’, Raipur’s reserve price was valued at Rs 149 lakhs (1.49 crore). Similarly, Panaji was at Rs 171 lakh (Rs 1.71 crore) and ‘B’ category Ludhiana’s reserve price was at a whopping Rs
783 lakh (Rs 7.83 crore). Cities like Moradabad, categorised as ‘D’, were priced at Rs 280 lakh (2.80 crore). The lowest RP was of Narwatti in Lakshadweep at Rs 5 lakh and Nagaon, a town in Assam at Rs 28 lakh.
Ease of license fees by MIB
Last week back MIB Secretary Sanjay Jaju had announced that the ministry has eliminated the non-refundable fee and the 2.5% annual license fee. This was done for the government's commitment to “light-touch” regulations aimed to promote ease of doing business.
To support broadcasters' revenue sustainability, Jaju announced a 40% increase in the base rates for advertisements on private FM stations.
According to radio players, this was much needed. This has been a long-standing request from the industry saying that de-link it from Non-Refundable One Time Entry Fee (NOTEF). “They have done it for all the new auctions. I hope that they will also do it for the existing station, which is where we are bearing a huge brunt because of a lot of the large stations. We are not operating at a revenue share but at the NOTEF level, which is much higher,” said a source. “It's good that the government has actually made all these changes and announcements in the new licenses. We are quite hopeful that they'll do this for our existing licences as well.”
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