FM auction touches Rs 970 cr

The names of the bidders have not been disclosed, say informed sources

The third phase of FM radio auction has attracted bids worth Rs 970 crore after 44 rounds were completed at the end of the 11th day of bidding on Monday. This is a huge leap from the second phase of auctions, in which a total of 243 channels were sold for Rs 1,100-1,200 crore.

In the ongoing auction, while the names of the bidders have not been disclosed, informed sources say that Delhi, Bengaluru and Bhubaneshwar have attracted the highest bids.

Twenty-one companies were pre-qualified to participate in the first batch of the phase-3 auction, in which 1,209 channels/frequencies across 350 cities are being sold. In the ongoing batch, 135 frequencies from 86 cities are up for grabs.

"By and large, the bidders have concentrated on some of the frequencies or cities, while the others have been ignored. For example, many cities in the north-east have gone un-bid in the first 40 rounds, while heavy bidding is seen for Delhi and Bhubaneshwar. In fact, the bidding for these two cities is still on," says a source.

While the cumulative provisional bid amount has crossed Rs 970 crore, compared to a cumulative reserve base price of Rs 450-odd crore, the bidding has not been proportional. This could be because of the 15 per cent cap on bidding. Under this, a company cannot bid for more than 15 per cent of the available channels. This has led to ferocious bidding for some channels, while some other channels have got no bidding at all. "When you have a limited number of channels to bid, everyone will make a beeline for the lucrative ones," says a person in the know. Of the 135 frequencies being auctioned, 45 have not been bid so far. The base price of some of the frequencies is very high, which has also been an inhibiting factor in the process.

Some participants are also worried they might not get the same frequency as they have in the existing cities. "All major players have frequency as part of their marketing strategy. Having different frequencies (in different cities) will not bode well for their promotions. Their identity is closely linked to the frequency - whether it is Radio Mirchi 98.3 FM or Radio City 91.1 FM or Red FM 93.4," says an executive with a radio channel, who did not wish to be named.

Frequencies will be allotted on the basis of ranking of the bidders. At the end of the auction, the bids placed by various participants will be compiled and each bidder will be allotted a rank, based on which frequencies will be allotted.