FM radio Phase-III gets government nod; FDI upped to 26%

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3 Nov 2010
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MUMBAI: The Union Cabinet has approved auctions for the third phase of FM radio privatisation, setting in process an economy for all the stakeholders to tap. The government expects to earn Rs 17.33 billion from auctioning the radio licences, Information & Broadcasting Minister Ambika Soni said today. Private FM radio operators will have to be prepared for higher payouts as they have to aggressively bid for licences through e-auctions. The Cabinet has cleared the proposal of the Information and Broadcasting Ministry for conducting ascending e-auction, as followed by Department of Telecommunications for the auction of 3G and BWA spectrum, for award of licence of FM channels, as recommended by the GoM on Licensing Methodology for FM Phase-III. FM Phase-III Policy extends FM radio services to about 227 new cities, in addition to the present 86 cities, with a total of 839 new FM radio Channels in 294 cities. Private FM radio operators, needing funding for the expansion, can now look at attracting foreign capital. The government has allowed the cap on foreign holding, in the form of foreign direct investment (FDI) and foreign institutional investors (FII), to go up from 20 per cent to 26 per cent. The radio operators can also carry news bulletins of
All India Radio (AIR). As per the new policy, the limit on the ownership of channels at the national level allocated to an entity has been retained at 15 per cent. However channels allotted in Jammu & Kashmir, North Eastern States and island territories will be allowed over and above the 15 per cent national limit to incentivise the bidding for channels in such areas. Also, private operators have been allowed to own more than one channel but not more than 40 per cent of the total channels in a city, subject to a minimum of three different operators in the city.
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