FM radio auction goes off air again

Leaving the 27 eligible private FM radio companies in the lurch, the government has, for the second time, postponed the bidding for 97 FM radio stations across 48 cities.

The bidding will now take place on December 29 and January 10. The Ministry of Information and Broadcasting had earlier re-scheduled the bidding to December 17 and January 7. No reason has been given for the latest change.

The financial bidding among the 27 short-listed private FM radio companies was scheduled for November 12 and November 26 but was cancelled just five days before the bidding.

Sources say the change has been effected as some ministry officials involved with the bidding process will not be present on Monday.

"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 process required the eligible companies to quote three amounts each per 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.

Majority of these stations had remained vacant after the last year's bidding for 337 FM stations, out of which licences were awarded for 266.

The ministry has already generated Rs 1,537 crore revenue by awarding 266 stations 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".

Big FM radio 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 Ltd (Radio Mirchi), South Asia FM (Sun TV), and regional players like Rajasthan Patrika Pvt Ltd, Ananda Offset Private Ltd, Shri Puran Multimedia Ltd (Dainik Jagran) and Synergy Media Entertainment (Dainik Bhaskar group).