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TRAI issues recommendations on Phase III migration for FM radio

MUMBAI: The Telecom Regulatory Authority of India (TRAI) has issued recommendations on migration to Phase III for private FM radio broadcasters wherein it has prescribed the licence period and the fee formula.

The authority has recommended that the period of permission for the existing operators, who migrate to Phase-III, should be 15 years from the date of migration.

While stating that a cutoff date for the existing FM radio operators for migration to Phase-III should be fixed by the ministry of information and broadcasting (MIB) after the completion of auction process, the authority recommended that it should not be later than 31 March 2015.

The authority also recommended that an explicit provision needs to be incorporated in the Notice for Inviting Applications (NIA) to permit an existing Phase-II operator to bid for an additional channel (frequency) in existing cities, where it already has an operational FM channel, subject to the condition that if it is able to win another channel in the existing city, then it would have to migrate all existing channel(s) also to Phase-III on such terms and conditions as may be prescribed by MIB.

The authority recommends that the migration fee should be:

(a) Group X cities (17 cities where no frequencies are available for auction, refer Annexure-IV):
Higher of –

  • Phase-II average bid of the target Group X city multiplied by a factor of 1.5; or
  • Phase-II highest bid of the target Group X city increased by the average increase in auction prices in Group Z cities (vis-à-vis their reserve prices) in the same category in Phase-III.

(b) Group Y cities (26 cities where 1/3rd or less of the total frequencies are available for auction, refer Annexure-IV):
Higher of-

  • Phase-II average bid of the target Group Y city multiplied by a factor of 1.5; or
  • Phase-II highest bid of the target Group Y city increased by the average increase in auction prices in Group Z cities (vis-à-vis their reserve prices) in the same category in Phase-III.
  • …but, the lower of
  • The above; and
  • Phase-III auction price obtained in the target Group Y city.

(c) Group Z cities (42 cities where more than 1/3rd of the total frequencies are available for auction, refer Annexure-IV):

  • The actual auction price obtained in Phase-III.

Categories A+ and A are deemed to be alike and therefore, considered together.

In all cases, the residual value of the Phase-II permission, calculated on a pro rata basis, should be deducted from the migration fee.

The authority stated that the methodology for determining the reserve price for fresh cities in Phase-III should be reconsidered as the current methodology might jeopardise the auction.

TRAI also said urged the government for acceptance and early implementation of its “Recommendations on Prescribing Minimum Channel Spacing, within a License Service Area, in FM Radio Sector in India” dated 19 April, 2012.

Recommendations on Migration of FM Radio Broadcasters from Phase-II to Phase-II