Second phase of FM Radio concludes with 279 stations

Televisionpoint.com Correspondent
The second phase of licensing in private FM radio finished today with the Government managing to sell a total of 279 radio stations of the 338 put on the block, and being assured of revenues of around Rs 1,100.

The government, which sold licenses in 91 cities across the country in five rounds, is set to receive Rs 900 crore as one-time entry fee while getting around Rs 227 crore as migration fee, to be paid by existing operators to shift in Phase II. In the last round today where the government made a bid to sell 64 radio stations in 19 'B', 'C' and 'D' cities of south India, it managed to sell 53 which ensured Rs 177 crore as revenues.

For record note, the I&B ministry has circulated its recommendations on the new policy package for private radio and was under the scrutiny of various ministries. High licence fee has hampered FM radio growth in the country. Out of the 40 cities that bid in May 2000, only 21 stations in 12 cities are operating, and were in the red uptil 2005, with this new policy as many as 300 FM radio stations are up for grabs.

I&B Minister announcing the bidding processes admitted that this would not be good news for AIR FM. "AIR FM would run into competition but there has be expansion of FM radio in the country," he said. He said government would pave the way for community radio and has plans to have 4,000 community radio stations in three years.

Industry players are happy with the government proposal for expansion of FM radio stations, but they wonder if there is any relief for existing radio players who have grown the market but suffered huge losses due to the fixed licence-fee regime. "Regulatory corrections are very much needed for the radio sector," said Deepak Kapoor, executive director and leader entertainment and media practice, PricewaterhouseCoopers.