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FM Phase III partial auctions get Cabinet nod, to add Rs 550 cr to govt coffers

MUMBAI: The FM radio industry can now heave a sigh of relief. The Union Cabinet has given its nod to conduct FM Phase III partial auctions and migration of private FM radio licences from Phase II to Phase III in 69 existing cities for 135 channels.

The auction process is stated to add estimated revenue of over Rs 550 crore (Rs 5.5 billion) to the public exchequer on successful auctions of all proposed channels.

The auctions will be on an ascending e-auction basis. The cabinet also gave its approval to migration (renewal of licences) of private FM radio licences from Phase II to Phase III on payment of migration fee according to TRAI recommendations.

The auctions for the 135 remaining frequencies which also include some border cities were announced earlier in the form of ‘partial auctions’. With the Cabinet giving the go-ahead, the auction process will be conducted before 31 March 2015.

The Association of Radio Operators of India secretary general Uday Chawla said, “We are very happy with the move and it is a very logical step. We were waiting for a long time for this and now the migration process can happen, and going ahead, the radio industry will now have stability and growth.”

It is a beneficial move for the radio industry as the upcoming auctions will also help the migration process move forward. Licences of existing operators which were for a 10-year term were stated to start expiring by March 2015. Now the radio broadcasters can undertake the migration process to get licences for 15 years.

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 auction of new frequencies of Phase III will be taken up later in the year owing to issues pending with the Telecom Regulatory Authority of India (TRAI).

Earlier, the I&B Ministry sought clearance from the Election Commission for e-auction of FM radio stations under Phase III.

The Ministry had written to the EC seeking its nod for publishing the information memorandum and Notice Inviting Applicants (NIA) for the auction.

Once the EC gives its nod, which is formally expected to be announced soon as it is a normal procedural step, the process of partial auctions will commence with the NIA.

The Phase III auction, held up for over three years, will open up 839 FM channels across 294 cities, expanding from 86 cities at present. Presently, there are 243 private FM channels operating in 86 cities of the country, spanning 26 states and three Union Territories.