TRAI reiterates recommendations on reserve price for FM radio auction

MIB had sought TRAI's views on the possible impact of COVID-19 on the FM radio industry and the future auction of FM radio

e4m by Javed Farooqui
Published: Aug 3, 2022 8:24 AM  | 4 min read
Radio

The Telecom Regulatory Authority of India (TRAI) has reiterated most of its recommendations on 'Reserve Price for Auction of FM Radio channels' to the Ministry of Information and Broadcasting (MIB).

The regulator had first issued the recommendations on 10th April, 2020. The ministry had sent a backreference dated 13th January, 2022, requesting TRAI to relook certain points and provide further recommendations under section 11(1) of the TRAI Act, 1997. The MIB had sought TRAI's views on the possible impact of COVID-19 on the FM radio industry and the future auction of FM radio.

TRAI noted that the MIB has not referred back any specific recommendation and observed that the FM radio sector did see a dip in revenues during the Covid period.

It further stated that the revenue trends indicate that the private FM radio sector seems to have recovered after Covid. It noted that the quarterly revenue for QE December 2021 has reached the pre-Covid level of March 2020.

Further, the Gross State Domestic Product (GSDP) per capita has shown positive growth for all States/UTs except Uttarakhand. The Mean rate of growth across 27 States/UTs is 33% and the corresponding Median rate of growth is 36.9%, TRAI stated.

While sending recommendations, TRAI obtained FM Radio listenership data from the Indian Readership Survey 2019. It pointed out that new data is not available as the fresh survey has not been conducted after 2019 due to Covid.

"As far as the impact of COVID-19 on the radio industry in the bidding during the ensuing Batch III e-auction is concerned, it can only be gauged once the auctions are conducted by the government," TRAI said in its letter to MIB.

The regulator contended that the points raised by MIB in its back reference do not reflect upon TRAI’s recommendations dated 10.04.2020 causing any material change. "Therefore, the Authority re-iterates its recommendations dated 10.04.2020 on Reserve Price for auction of FM Radio channels. The Government may decide the time for auction keeping the efficient use of available spectrum in consideration," it added.

TRAI has also reiterated the recommendation that the auction of the remaining channels of Phase III should be done by delinking them from technology for facilitating a smooth transition from analog to digital radio broadcasting, radio broadcasters may be permitted to use any technology (analog or digital) for radio broadcasting on the frequency allocated to them through auction in the future, based on their business plan.

"A service provider has the commercial interest and will be the best judge to decide on the most suitable technology. Any restrictions of choice of technology will only impair the development," the TRAI said.

Summary of recommendations dated 10th April 2020

1. Reserve Price (RP) for FM radio channels in a city, except the cities situated in NE, J&K, and Andaman & Nicobar, should be set equal to 0.8 times the valuation of FM radio channels in that city.
2. RP for FM radio channels in a city situated in NE, J&K, and Andaman & Nicobar should be set equal to 0.4 times the valuation of FM radio channels in that city.
4. The RPs in 10 border cities in the ‘Others’ category in Phase-III should be Rs. 5 lakh per channel.
5. Auction of remaining channels of Phase-III should be done by delinking them from technology. Broadcasters should be permitted to use any technology (analog or digital or both) for radio broadcasting on the frequency allocated to them through an auction in the future. In case radio broadcasters opt for digital technology, they should be permitted to broadcast more than one channel subject to technical feasibility on a single frequency allocated to them.
6. Existing ceiling limit of 15% of total FM radio channels in the country permitted to a permit holder is no longer valid as the fear of monopoly is no longer real. This limit is also not practical, as the total number of channels will vary depending on availability. Hence, such a limit may be withdrawn.

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