Cabinet nod to e-auction proposal of 730 FM channels in 234 cities

In July last year, former I&B minister Anurag Thakur had said 808 FM radio stations will soon be e-auctioned across 284 cities and added that the country has 388 FM radio stations in 113 cities across 26 states and 5 UTs.

As per the ministry, Uttar Pradesh has been assigned the maximum of the 234 uncovered cities at 32, followed by 22 cities in Andhra Pradesh and 20 at Madhya Pradesh.

In its statement Wednesday, the ministry said private FM radio rollout in 234 cities and towns — many of them LWE-affected areas and part of aspirational districts — will fulfil the demand for private FM radio and offer new and native content in local languages.

The decision, it said, is aimed at enhancing local content, creating new employment opportunities, and strengthening the government’s outreach, especially in underserved regions.

“Setting up private FM radio in these areas will further strengthen government outreach,” the statement said.

The Cabinet also approved the proposal to charge Annual License Fee of FM channels as 4% of gross revenue, excluding GST, which will be applicable to 234 new cities and not those which got frequencies in earlier auctions.

In 2015, the I&B Ministry held the first batch of e-auctions under Phase III policy, which was a success with the government earning `1,187 crore from sale of 97 channels in 56 cities and an additional `1,200 crore as migration fee for 245 stations moving from phase II to III. While a base price was applicable even then, the majority of stations were in tier-1 cities.

In the second batch, 66 channels in 48 cities were sold and the government earned only `200 crore. One of the key reasons touted for the poor response was the high base price assigned to airwaves, making it non-viable even for several leading FM radio players to participate in the auction, industry sources told The Indian Express.

In 2017, owing to disagreements over multiple issues with the industry, the auction of the third batch of 683 private FM radio frequencies in 236 cities approved by the Union Cabinet did not take off.

An industry source told The Indian Express that the Cabinet nod to the proposal for auctions for a third batch of private radio frequencies for 234 new cities is surely a step forward for expansion of the FM radio footprint. “However, the list detailing the reserve price for each city is awaited for a comparison with the second batch of the auction,” the source said, adding even TRAI had made some corrections in the base prices based on a matrix.

The private FM radio industry has been against assigning any reserve price to frequencies.

As per the government, Phase III of the FM Radio Policy was introduced to expand private FM radio broadcasting to cover more cities, particularly those that remained uncovered in previous phases.

The first two phases covered only cities with a population of over three lakh and some state capitals. Despite the growth of the FM radio industry in Phase II, border areas, particularly in J&K, northeastern states and Island territories, were largely missing from the FM map and there were unused frequencies from phase II, prompting the decision on bringing in the third phase of the policy.