FM licences in 100 cities up for grabs

FM radio licences for 100 cities will soon be up for grabs. The Centre will initiate the process of distribution of licences in the next two months.

Sources in the information and broadcasting (I&B) ministry said: "The government did not receive bids for 57 licences in the second phase, which was over nearly four months ago. Also, 23 successful bidders have surrendered their licences as the existing laws do not permit anyone to control more than 15 per cent of the total allotted FM frequencies. Above all, we will auction fresh rights for FM business in 20 cities."

According to the regulations, no company can hold more than 15 per cent of the total FM licences. This in effect means that one company can get licences for only 45 stations.

The second phase of bidding for private FM radio witnessed the government selling about 280 radio stations across 91 cities, collecting revenue to the tune of Rs 1,100 crore.

The process also saw aggressive bidding by almost all players after the government decided to go in for a revenue share regime as against the licence fee structure of the first phase, which took place five years ago.

It had been earlier planned that bidding for the third phase would begin in 2007. "With the second phase of FM licence distribution giving such a lift to the sector, the I&B ministry is going ahead with the third phase when the interest is high," said sources in the industry.

Players such as Times Group, Sun Group, Music Broadcast and Radio Mid-Day have expanded their network and new players such as the Anil Ambani-controlled Adlabs Films and HT Music and Entertainment have entered the FM space.

Even foreign companies started picking up stakes in Indian entities after the government recently allowed 20 per cent foreign direct investment in the radio space.