“Bidding high or low is in the FM players’ hands”

Vineet Singh Hukmani, MD, Radio One states that while Phase III FM auctions are still stuck, there are a few things that the Govt is now doing right

e4m by Saloni Surti
Published: Dec 20, 2012 4:44 AM  | 2 min read
“Bidding high or low is in the FM players’ hands”

In conversations going on between the Ministry of Information and Broadcasting (MIB) and the Rajya Sabha, Minister of Information and Broadcasting, Manish Tewari has indicated that the Phase III FM auction bidding price will start at the highest bid price of Phase II.

 

While initially the bidding in metros was slated to start on the highest bid of previous auctions’ prices, the bidding in new cities will now also start on the highest bid received in Phase II auction for that category of cities in that region.

Reacting to this development, Vineet Singh Hukmani, Managing Director, Radio One says that this announcement comes as now surprise.

 

Speaking to exchange4media, Hukmani explained that the MIB is sticking to the Phase III policy as released officially in the beginning of this year and all players are aware of the contents of this policy.

“Phase III is all about spreading FM radio to almost 550 more C and D class towns, where bids will be very low since many are new FM towns. This is the main focus of the government. Coming to the metros, which are hardly consequential since there are only one or two frequencies left, if the bids are high, the players should not bid. Bidding high or low is in the players’ hands and not the government. The government only sets the price,” he emphasised.

 

According to Hukmani, what is required now is that the government allows quick signing of the Grant of Permission Agreement (GOPA) to really assess existing and new player interest. The MIB then has six months to evaluate interest levels or pricing before the actual bidding begins.

However, in an announcement dated December 19, 2012, the Government has extended the deadline for signing GOPA Migration for FM Phase II operators to
June 30, 2013.

 

Despite the delays and confusions, Hukmani is of the view that there are a few things that the government is now doing right. “It is good that the new I&B Minister is in the driving seat and not relying on short-sighted and impractical suggestions of the TRAI,” Hukmani remarked.

According to him, the amount of auction money to be raised from radio is minuscule (Rs 1,500 crore) when compared to the 2G auctions (Rs 28,000 crore), so perhaps the MIB feels that the sale of smaller C and D towns will fetch that money and hence they are okay with no bids for metros, since they will be priced high due to Phase II pricing. 

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