It has been learnt that Prakash Javadekar, Minister for Information & Broadcasting, has given his signature to the ad inviting radio operators for technical bids; the first step in the upcoming Phase III migration. It also appears that the e-auctioneer for the process has been finalised. However, it is not clear which one of the shortlisted agencies has been selected.
With the Ministry already having given its tacit approval to TRAI’s important suggestions on license fee and migration formula, radio operators can now expect the process to speed up. According to a source familiar with the developments, the ad had been waiting for the minister’s nod for some days.
Last week, the MIB had decided to not take TRAI’s suggestion of a review of the reserve price, as well as an earlier recommendation on reducing frequency gaps to 400kw of separation.
FM Phase III: No reduction of reserve price or frequency gap, but migration formula accepted
The reason behind this decision seemed to be that the government does not want to undertake laborious activities that could delay the migration to Phase III. However, the industry has been generally happy with the developments over the last few weeks.
“TRAI's recommendations were for the fees for migration of Phase II licenses to Phase III by issuing new ones. Those recommendations have been accepted by the MIB. We expect a formal announcement soon. Broadcasters are happy that the Phase III policy is set to roll and that the migration of Phase II licenses will happen without a glitch,” said Prashant Panday, MD and CEO of ENIL, which operates Radio Mirchi.
Getting the Phase III auctions started as soon as possible is priority for the radio community. Vineet Singh Hukmani, MD of Radio One, also opined that there was no more time for the policy to go back for discussions in the parliament. “By November, there will be a three-year delay in the implementation of Phase III. It would have been great to have the reserve price lowered, but it is still fine,” he said.
Operators like Hukmani are understandably on tenterhooks, as licenses for many of them will start expiring from March 2015. If the auctions happen by December as planned, it is still cutting it too close for them, since in a best-case scenario the entire auction process will be complete by February.
Panday also suggested that the government wants to get the auctions rolling without any further delay and he agreed that it was the right thing to do. Speaking about the issue of reserve fee, he said, “The current reserve fee policy is extremely onerous and will harm the industry. But again, the MIB has decided to focus on rolling out Phase III in its current form and shape. If reserve fee needs to be re-looked at in the future, I'm hopeful the government will do so.”
There is always the possibility that the government might re-look at reserve fees if certain cities see a lack of interest from operators during the first round of auctions and this seems to be something even operators are hoping for.
Apurva Purohit, CEO of Radio City 91.1 FM welcomed the acceptance of TRAI’s migration formula as well as the license period extension to 15 years, calling it “critical” to the survival of the industry. “Now all that is awaited is the notification to mark the start of the auctioning for Phase III, for which the industry is very bullish currently. We hope that the auctions are not delayed any further,” she added.