Trai's move on FM may be rejected

The government is likely to reject the Telecom Regulatory Authority of India's (Trai) recommendations on the second phase of private FM radio licensing pertaining to a revenue share regime.

The regulator had recommended a one-time entry fee and 4 per cent of the revenue share as the annual licence fee for the companies. According to senior government officials, the main reason for rejecting the proposal was the government's fear of revenue loss.

Under the current regime, the government gets about Rs 120 crore as revenue from private FM radio companies, while under the proposed scheme it would come down to just Rs 10 crore. Senior government officials pointed out that the finance ministry had raised objections to this proposal.

"We have looked at the recommendations closely. It will lead to a major revenue loss," said the official.

Besides, the government is also of the view that it did not have any system to monitor the revenue earnings of private FM radio companies.

"The government does not have any organisation or methods to monitor the revenue flow of companies and to ensure that they are following the rule. Besides, it also does not have any auditing bodies to audit the balance sheets of these companies," said a government official.

Besides, the home ministry has also raised objections to allowing news and current affairs programmes on FM radio companies and the government is expected to reject the regulator's recommendations in this regard.

Trai wanted government to take a re-look at the present policy of now allowing news and current affairs programmes on private FM radio channels.

Government is also likely to stipulate that private FM radio companies wanting to operate in metros will have to operate services in a non metro city also.

"This has been done to ensure that the companies will not limit their operations only to lucrative markets," said the official.