The Ministry of Information and Broadcasting has postponed the FM radio auctions for the fourth time in a row. The Ministry has now intimated January 14 and January 24, 2008 as the new dates for auction instead of December 29, 2007 and January 10, 2008, which were the earlier dates.
Sources said that their applications were rejected on technical grounds and now the Ministry might take a re-look at some of the rejected applicants so as to give them a chance to participate in the bidding, especially after the High Court directive in the Radio Today case.
The omissions in the current list of bidders include existing radio operators, Radio City and Radio Today. With the Phase III policies to be announced shortly, many operators feel that these bidding should be postponed to Phase III because then the policy would be clear, there would be a level playing field and the Government would get more revenue.
The bidding among the 27 shortlisted private FM radio companies was originally scheduled for November 12 and November 26, 2007, but was cancelled just five days before the bidding. The bidding process requires eligible companies to quote three amounts for every vacant station (license) in the form of bank drafts. The highest financial bid will win the frequency. An initial payment of 50 per cent of the bid amount has to be made at the time of receiving the letter of intent soon after the bidding.
A majority of these stations had remained vacant after last year’s bidding for 337 FM stations, out of which licenses were awarded for 266. The Ministry generated revenue of Rs 1,537 crore by awarding these licenses to over 30 companies for about Rs 5.7 crore per station. The present bidding might get less revenue as some existing players are not being allowed to bid.
The battle for key vacant stations is expected between Reliance, Unicom (Big 92.7 FM), Entertainment Network India Ltd (Radio Mirchi), South Asia
FM (Sun TV), and regional players such as Rajasthan Patrika, Ananda Offset Private, Shri Puran Multimedia (Dainik Jagran) and Synergy Media Entertainment (Dainik Bhaskar Group).
It may be noted that most of the big players can’t bid for more than 15 per cent of the channels as they have exhausted their quota in the earlier bids.