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FM players ask for fresh concession

23-August-2002
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FM players ask for fresh concession

Private FM radio licencees in three metros—Delhi, Kolkata and Chennai—have requested the government for a fresh concession. The players want their ten-year licence period to start from the day of operation, and not from August 29—the deadline for paying the licence fee for the three metros.

Although the government is not allowing them to go for individual interim set-ups and not extending their licence fee deadline, the FM players’ plea for extended licence term has not been rejected yet. The government has not committed to the FM players on that either.

The reason behind all the complexity is that the private FM radio stations in three metros will take another 24 weeks (roughly six months) to come up, as per the time given by the integrator, Broadcast Engineering Consultants India Ltd (Becil). And, the licencees do not want to waste six months of their 10-year licence period doing nothing. Therefore their plea that their licence term should be treated as beginning 24 weeks from now, instead of on August 29, 2002.

Such a scenario, if accepted by the government, would mean that the private players in three metros would have around ten years and six months of licence term, instead of ten years. So, even if they have to shell out the licence fee in another eight days to meet the August 29 deadline, they will not lose out in terms of total licence period.

As far as the government is concerned, it’s looking at what’s in hand, and not much beyond. So, even if it allows FM players the desired six-month extension in the licence period, government is making sure that it doesn’t lose out on the interest money on the licence fee that’s due on August 29.

The total licence fee will be worth around Rs 30 crore in the three metros. While licence fee for the Delhi circle is Rs 7 crore, that for Chennai and Kolkata are Rs 3 crore and 1 crore, respectively. The licencees in these circles include Radio Today (Living Media), Mid-Day Radio, Entertainment Network (Bennett Coleman), Millennium Radio and Music Broadcast Pvt Ltd (Star-Ispat venture).

Technically speaking, government has the power to encash the bank guarantee, equal to the first year’s licence fee, deposited by the FM players, if the licencee fails to deposit the licence fee within seven days of the beginning of each year, if the licencee stops the service without giving one year’s notice, or if the licencee is declared insolvent or bankrupt.

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