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Trai says FM radio licence fee too high

20-November-2004
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Trai says FM radio licence fee too high

The tiff between the government and the Telecom Regulatory Authority of India (Trai) has taken a new twist, with the regulator insisting that the present high licence fee regime for private FM radio companies is not sustainable.

The government had earlier rejected Trai's recommendations that it migrate to a revenue share model from the present licence fee regime.

Besides, Trai has also reiterated its earlier recommendation that private FM radio companies be allowed to air news and current affairs programmes.

"Allowing news and current affairs will also boost listenership and, thus, revenues," it said in response to the government's observations on its recommendations on licensing issues relating to the second phase of private FM radio broadcasting earlier in August.

On the government's contention that an annual licence fee of 4 per cent of gross revenues was unacceptable, as it would reduce the mop-up to low single-digit figures, against the over Rs 100 crore as per the current set-up, Trai said it was not sustainable.

"It needs to be strongly emphasised that the current revenues of more than Rs 100 crore per annum are not sustainable. The important point to emphasise is that all licencees have incurred losses and that in aggregate this loss is more than the existing licence fee," Trai said.

"Of even greater significance is the fact that out of the 108 frequencies put on bid, only 21 are operational today, and of these, two have also given notice that they would close down," Trai said.

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