FM radio auction off air again

I&B ministry move aimed at attracting more players.

Looking to include more radio operators in the upcoming FM radio auctions for the 97 vacant stations in 48 cities, the ministry of information and broadcasting (I&B) has postponed the auctions for the third time in a row, leaving the 27 eligible private FM radios in the lurch.

The I&B ministry has intimated January 14 and 24 as the new dates for the auction instead of December 29 and January 10.

While no official reasons have been assigned for the postponement, sources say that an additional 6-8 radio companies want to participate in the bidding and are lobbying aggressively for the necessary permission to figure in the list of eligibles.

Among the noticeable ommissions in the current list of bidders include existing radio operators, Radio City and Radio Today.

Sources say that their applications were rejected on technical grounds and now the ministry may take a relook at some of the rejected applicants so as to give them a chance to participate in the bidding.

However, the official concerned with the radio bidding process could not be reached, despite several attempts.

The eligible radio operators are not amused with the last-minute cancellations.

"It's frustrating to get a last-minute letter from the I&B ministry which simply says that the dates have been postponed. This changes our schedule and preparations," a senior executive of a leading FM radio company said from Mumbai.

The bidding among the 27 shortlisted private FM radio companies was originally scheduled for November 12 and November 26, but was cancelled just five days before the bidding. The new dates given at that time were December 17 and January 7, which were later changed to December 29 and January 10. Now, the dates are changed again to January 14 and 24, 2008.

The bidding process requires eligible companies to quote three amounts for every vacant station (licence) in the form of bank drafts. The highest financial bid will win the frequency. An initial payment of 50 per cent of the bid amount has to be made at the time of receiving the letter of intent, soon after the bidding.

A majority of these stations had remained vacant after last year's bidding for 337 FM stations, out of which licences were awarded for 266. The ministry generated a revenue of Rs 1,537 crore by awarding these licences to over 30 companies (about Rs 5.7 crore per station).

The present round of bidding is expected to generate about Rs 350 crore as most of these vacant stations are in cities that are not considered lucrative.

Large FM companies are in the fray, apart from some regional players. The battle for key vacant stations is expected between Reliance Unicom (Big 92.7 FM), Entertainment Network India (Radio Mirchi), South Asia FM (Sun TV), and regional players such as Rajasthan Patrika, Ananda Offset Private, Shri Puran Multimedia (Dainik Jagran) and Synergy Media Entertainment (Dainik Bhaskar Group).

NO SIGNAL

The FM radio auction is for 97 vacant stations in 48 cities, which have 27 FM stations

Among the noticeable omissions in the current list of bidders are existing radio operators Radio City and Radio Today