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Day 1 of FM radio e-auction sees intense bidding for Delhi, Mumbai

MUMBAI: The FM radio Phase III e-auction, which commenced today at 9:30 am, saw aggressive bidding for metro cities like Delhi and Mumbai during the four rounds of bidding.

The reserve price for Mumbai, where two frequencies are up for grabs, was set at Rs 35.2 crore (Rs 352 million) and after today’s four clock rounds, the competitive bidding took the price up to Rs 41.9 crore (Rs 419 million). As listed by the Ministry of Information & Broadcasting (MIB), the percentage price increment applicable for the next clock round will be 8 per cent.

Six FM radio players vied for two frequencies (91.9 and 106.4) up for auction in Mumbai.

The city of Delhi, which has one frequency (107.2) up for grabs, saw its reserve price of Rs 31.4 crore (Rs 314 million) go up to Rs 37.4 crore (Rs 374 million) at the end of the four clock rounds.
The national capital grabbed the attention of five players who fought it out for one frequency. The percentage price increment applicable for the next clock round for Delhi will also be 8 per cent.

Prior to the commencement of the auctions, it was expected that there would be an intense fight for the metro cities of Mumbai and Delhi since these are the most lucrative markets for radio players. Moreover, with the Phase III guidelines allowing an operator to hold multiple frequencies in a city, major radio players were expected to compete for the frequencies in these cities as there is a lot of demand but limited supply.

A senior radio executive told TelevisionPost.com that the metros are seeing a lot of demand because they constitute at least 30–40 per cent of an operator’s entire radio business.

Among the big players that could be vying for these frequencies are Radio Mirchi, Big FM and Fever FM that have deposited the highest amount of earnest money for participation in the auctions.

A source further added that Fever FM is indeed looking for a second frequency in Mumbai and Delhi.

The price for these cities is expected to go up further.

Meanwhile, Category C city Bhubaneswar saw surprisingly higher interest from bidders as five players fought for one frequency, thus taking up its reserve price from Rs 79 lakh (Rs 7.9 million) to Rs 99.5 lakh (Rs 9.95 million). This could also be because three to four of the new entrants are based in Odisha.

Bengaluru and Chennai witnessed three players each vying for one frequency in the respective cities. The reserve price for Bengaluru, which went up from Rs 21.6 crore (Rs 216 million) to Rs 25 crore (Rs 250 million), will see a percentage price increment of 5 per cent. For Chennai, the reserve price shot up from Rs 12.2 crore (Rs 122 million) to Rs 14.2 crore (Rs 142 million) and will see a price increment of 5 per cent in the next clock round.

The cities of Chandigarh, Surat and Varanasi did not see any bidding on the first day. Hyderabad saw only one player bidding even as there are four frequencies available in the city.

At the end of Day 1 of bidding, 78 channels in 54 cities became Provisionally Winning Channels with cumulative provisional winning price of around Rs 395 crore (Rs 3.95 billion), vis-à-vis their aggregate reserve price of about Rs 357 crore (Rs 3.57 billion).

During the day, four clock rounds of bidding took place. 135 FM channels in 69 existing Phase II cities were put up for auction in the first batch.

The auction activity requirements were set at 80 per cent. Twenty-six bidders were allowed to participate in the auction. The ongoing auction is a simultaneous multiple round ascending (SMRA) e-auction being conducted online from an auction control room at Shastri Bhawan, New Delhi.

The bidding will re-commence tomorrow on 28 July 2015 at 9:30 am.

Link for table: http://mib.nic.in/ShowhomeDocs.aspx