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Inter-ministerial talks soon on FM Radio privatisation

30-January-2004
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Inter-ministerial talks soon on FM Radio privatisation

Inter-ministerial consultation process for the second phase of FM radio privatisation would begin in a couple of days, according to government sources. However, speculation is rife about whether the Union Cabinet can take a decision on the issue, as the Lok Sabha would be dissloved on February 6, to usher in early polls.

If a decision on FM radio is seen as a poll sop, it may be deferred till the next government is formed. If not, the issue would be taken to the Cabinet after about a month.

The inter-ministerial consultation for the second phase of private FM radio would involve home, external affairs, law and finance ministries. This process, it is understood, would take about a month, after which the draft recommendation can be taken to the Cabinet. There’s a possibility that the Telecom Regulatory Authority of India (Trai), which has the additional responsibility of regulating the broadcasting sector, would help fix the revenue-sharing model for private FM radio players.

Among others, the issue of allowing ‘news’ in private FM radio is turning increasingly controversial. There’s a view within the government that it may be a threat to the security of the country, as radio players could air “anything” in the garb of news. Even as supporters of news on private FM say that there should be parity with print media, others point out that the layman on the street could get easily influenced by radio.

For the second phase of FM radio privatisation, an expert committee, headed by Ficci secretary general Amit Mitra, submitted its recommendations to the government two months ago. These included revenue-sharing with government at 4 per cent of gross revenue of an FM radio licensee. “This revenue share shall be reviewed by a committee every five years and may be increased/decreased, depending on the then prevailing market conditions,” it said.

During the first phase of FM privatisation, players had to pay an annual licence fee, based on the city that a licensee was in.

The Amit Mitra committee also said that while the licence should be valid for a period of 10 years, as in the case of Phase-I, “renewal of licence should be permitted for a further period of five years, subject to satisfactory performance by the licensee”.

For the existing private FM players, migration to the new licensing conditions and revenue-sharing model is expected to involve a lot of legal hassles.

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