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FM Phase III: Cumulative provisional winning price reaches Rs 1130.51 crore

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FM Phase III: Cumulative provisional winning price reaches Rs 1130.51 crore

Mumbai, Bangalore and Delhi saw no new activity as they closed with a provisional winning price of Rs 169 crore, Rs 109 crore and Rs 122 crore. As of now 80 rounds of bidding have been completed with 94 channels in 56 cities becoming provisional winning channels.

As Friday ended, cumulative provisional winning price was about Rs 1130.51 crore against their aggregate reserve price of about Rs 459 crore. Thus the summation of provisional winning prices surpassed the cumulative reserve price of the corresponding 94 channels by Rs 671.65 crore or 146.3 per cent. Overall, cumulative provisional winning price exceeded the total reserve price of the first batch i.e. Rs 550.18 crore by Rs 580.33 crore or 105.5 per cent. 

The auctions have also reached a stage where the auction activity requirement now stands at 100 per cent. This means that the auction has reached its last stage and now a bidder will have to have bids equal to all the eligibility points attached to them at the start of each clock round.

The cumulative provisional winning price for the three metros stands at Rs 400 crore. The highest eligible bidding amount of any station is of Radio Mirchi, which can bid up to Rs 320 crore. The others with big money budgets are Red FM, which can bid upto around Rs 300 crore, while Big FM can bid upto Rs 200 crore and Fever FM can bid upto Rs 250 crore. It is quite safe to assume that none of these will be able to lock down on the coveted extra frequency in all three cities. It would be beyond the reach of most of them to get channels in even two of the cities.

For example, as of current provisional winning price, getting a frequency in both Mumbai and Bangalore would lead to a combine cost of around Rs 230 crore, which is more than what Big FM can spend and almost the entire amount that Fever FM can bid.

The aggressive bidding for these cities, which has seen prices soar beyond pre-auction expectations are sure to have caused many operators to rethink their strategy and it now seems that they have started to look at the other non-metro options available to them.

Cities like Allahabad and Jodhpur saw extra bids for the available frequencies on Day 20, which could be because operators want to use up the eligibility points in accordance with the rules or that now they are shifting their focus on the smaller (and cheaper) frequencies. Shillong was another city that saw 3 bids for its 2 frequencies, while other non-metro cities like Lucknow, Muzzafarpur, Varanasi, etc. also saw new bids.

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