Government considering single entry fee for FM operators

Our Economy Bureau
13 August 2004

New Delhi: The Telecom Regulatory Authority of India (TRAI) yesterday recommended a low one-time entry fee and a revenue share of four per cent in the second phase of private FM radio licensing. Apart from this, the regulator also suggested that existing licence holders would be allowed to migrate to the second phase.

TRAI also called for a review of the foreign direct investment norms in the sector as well as the ban on airing news and current affairs programmes. The regulator also recommended a review of cross-media ownership issues so that monopolies did not emerge in news dissemination.

Under the existing regime, the licence fee is determined by an auction, and it escalates 15 per cent every year.

The losses incurred by private FM radio companies in 2002-03 has been estimated at Rs 110 crore. TRAI` also recommended that all bidders in phase-I should be eligible to bid for phase-II, subject to them dropping the cases they have filed against the government.

It, however, pointed out that bidders, both new and those having the phase I licence, would be evaluated and the highest bidders for any location would be selected.

To prevent non-serious players in the sector, it was also recommended that all qualified bidders would have to deposit 50 per cent of the reserve price of phase I along with the financial bids. In addition each successful bidder would have to pay the licence fee within a week awarding the licence.