TRAI notifies reserve prices for FM auctions; industry flags gaps 

The Telecom Regulatory Authority of India (TRAI) has released its recommendations on reserve prices for the auction of FM radio channels. The move follows a request from the Ministry of Information and Broadcasting to expand private FM services in several cities.

The announcement comes at a time when the sector is struggling with weak advertiser interest and a poor response to the most recent auctions.

Read e4m report on TRAI issuing guidelines on FM radio

According to TRAI, the ministry sought guidance on pricing for FM channels in 18 Category E cities in Himachal Pradesh, Uttarakhand and the Union Territory of Jammu and Kashmir. It also covered Bilaspur in Chhattisgarh, Rourkela in Odisha and Rudrapur in Uttarakhand.

After public consultations and an open house discussion, the regulator finalised its recommendations. Reserve prices have been set at Rs 83 lakh for Bilaspur, Rs 1.20 crore for Rourkela, Rs 97 lakh for Rudrapur and ₹3.75 lakh for Category E cities.

Read an e4m deep dive on how heartlands power FM's future in India

The minimum net worth requirement for Category E markets has been pegged at ₹30 lakh, while thresholds for other cities remain unchanged under Phase III guidelines. Annual authorisation fees in Category E towns will be fixed at 2% of adjusted gross revenue for the first three years, rising to 4% thereafter.

Auctions show weak demand

The new pricing framework follows a disappointing auction cycle.

“More than 750 stations across 235 locations were offered, but only 55 stations in 43 cities found takers. Many large players, including Radio Mirchi and Radio City, stayed away. I’m honestly not sure how many takers there will be for these licences,” said one industry executive, who requested anonymity.

To know more: Read how digital tunes have helped radio revenues 

“The recent auctions were not very successful because the key pain points of the sector are still not addressed. That is why only a handful of players who still see potential chose to participate,” the executive added.

Rahul Namjoshi, CEO, MY FM, welcomed TRAI’s new measures. “We wholeheartedly welcome the TRAI recommendations. These progressive measures have the potential to unlock the next phase of growth for the radio industry by encouraging innovation, inclusivity, and wider participation. They address long-pending bottlenecks and set the stage for radio to evolve into a more vibrant, sustainable, and future-ready medium. We are optimistic that their implementation by the Ministry will enable both broadcasters and advertisers to create greater value for listeners and the overall media ecosystem.”

Namjoshi highlighted that the recommendations directly address some of the most critical pain points: cost efficiency through voluntary infrastructure sharing and relaxed co-location rules; market expansion via lower reserve prices in Category E cities; and content innovation with permission to air up to 10 minutes of news and current affairs per hour. He added that balancing affordability for new entrants with stability for incumbents would help ensure a healthier FM ecosystem.

Community and private radio concerns

TRAI has also suggested broader reforms such as delinking licence fees from the one-time entry fee and enabling streaming of radio programmes.

But broadcasters argue that intent alone will not fix the economics. Larger networks have echoed concerns of smaller players around slow implementation.

Nisha Narayanan, Director and COO of Red FM and Magic FM, said, “We welcome TRAI’s proposed reforms for the FM radio sector. It is encouraging to see such comprehensive recommendations being made, which reflect a genuine understanding of the industry’s needs. However, while these steps are commendable, what truly matters is timely implementation. Over the years, many favourable policy suggestions have been made for radio, but haven’t been implemented yet. Failure to act promptly could affect businesses and hinder the growth of the industry in the long run.”

Archana Kapoor, founder of Radio Mewat, stressed that the new guidelines do not address the viability crisis in smaller towns. “The recent auctions showed how unattractive small-town markets remain because of high reserve prices and negligible ad demand. Unless reserve pricing is drastically rationalised and government advertising is guaranteed, stations will struggle to survive. Despite their social value, community radios remain financially unsustainable because revenue models in smaller markets simply don’t exist.”

Namjoshi too pointed out that some long-standing concerns remain. “FM on every mobile handset is the single biggest catalyst for India’s radio future. Ensuring FM tuners are mandatorily enabled on smartphones will exponentially grow listenership. In times of disaster and emergencies, radio has consistently proven to be the most reliable medium.”

He added, “Making FM accessible on mobile devices is therefore not just a growth driver but also a critical public utility. Additionally, rationalising the 4% annual licence fee and reducing the GST on radio advertising would make the medium far more competitive.”

The road ahead

For now, TRAI’s new reserve pricing regime may make it easier for operators to enter underserved markets, particularly in smaller (Category E) towns.

But unless long-pending demands around licence fees, GST and mobile handset access are addressed, industry players fear FM radio will continue to lose ground to digital and streaming platforms.

The consensus across stakeholders is clear: reform is welcome, but implementation and follow-through will determine whether FM radio can stay relevant in India’s evolving media landscape.