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Trai wants to defer licence fee for FM channels

07-April-2004
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Trai wants to defer licence fee for FM channels

In what may come as reprieve to the country’s troubled private FM radio companies, the Telecom Regulatory Authority of India (Trai) recommended deferment of licence fee for them. The companies were due to pay the licence fee for the next year’s operation by this month end.

The regulator has taken this opinion in view of the impending final decision on a policy recommended by the FM radio committee headed by Amit Mitra. In its interim recommendations, the regulator said the licencees would be given the option of deferring the payments till a final decision was taken.

“This would be subject to the condition that the dues as finally decided by the government, after taking into account the recommendations of Trai, would be collected from the licencees with interest from the due date, on the quantum of licence fees found to be payable,” Trai said.

The final recommendations of Trai will address the issue of the licence fee payable as well as the relevant interest rate. Trai said it had been in the process of preparing a consultation paper on the FM radio sector after consultations with stakeholders. It had also called for the accounts of first-phase licencees and these were being scrutinised.

The information and broadcasting ministry had on February 12, sent the report of the task force headed by Amit Mitra to Trai for its recommendations.

The government had pointed out that in respect of Mumbai, the next licence fee for the third year was due in April this year. In Delhi, Kolkata and Chennai, licencees had not paid the fee for the second year during August last year and requested the government to charge the fee from the date of actual operation. This matter was under consideration of the government and if approved these licence fees would also become due in April.

The FM radio companies had called upon the government to allow them not to pay the licence fee till it took a view on the FM Radio committee. The committee has suggested a change over from the present fee regime to a revenue share method. It has recommended a revenue share of 4 per cent of gross revenue, in the revenue share regime.

In the existing regime, the license fee was determined by an auction process, which would escalate by 15 per cent every year. For example, the annual licence fee for Delhi circle in the first year was Rs 7.18 crore which would go up by 15 per cent this year. Most of the FM radio companies have told the government that their revenue is not even sufficient to meet the licence fee requirements.

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