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Govt plans to appoint advisor for phase II of FM privatisation

21-October-2004
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Govt plans to appoint advisor for phase II of FM privatisation

The Information and Broadcasting Ministry is planning to appoint an investment banker or a financial advisor to oversee the second phase of FM radio privatisation.

The Ministry has decided to ask Broadcast Engineering Consultants India Ltd (Becil), the public sector company, to scout for the advisor. Sources said, "The Ministry feels that outside financial consultants would be in a position to evaluate the bids better and enable the Ministry to generate higher revenue. Since these consultants are involved in various financial arrangements of corporates, they are well versed with the tendering process. The idea is to bring in more professionalism."

The Government is, however, keen on maintaining the bidding amount at realistic levels as it wants even smaller players to participate in the process.

The Government is hopeful of embarking on the second phase of FM privatisation next year, wherein more frequencies could be allotted in the metros and several more cities and towns would be added to the list.

Also, the Information Ministry is likely to ask Becil to work on the technical evaluation of the bids. The Government-owned consultancy firm had earlier offered advice on the issue of co-location of towers by the FM radio operators in the metro.

Meanwhile, the Government has to firm up its views on the revised norms for the sector. It has more-or-less ruled out the option of switching over from the present licence fee regime to a revenue share arrangement.

The Telecom Regulatory Authority of India, in its recommendations for the second phase of FM radio privatisation, had suggested a flat entry fee and a 4 per cent revenue share. But the huge revenue loss has deterred the Government from going ahead.

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