Trai seeks hike in FDI in FM radio

'The FM radio companies that air news should be allowed an FDI cap of 26%'.

The Telecom Regulatory Authority of India (Trai) has, for the first time, recommended an increase in the foreign direct investment (FDI) cap in private FM radio channels from 20 per cent to 26 per cent or more, and also allowing them to broadcast news.

These are long-standing demands of the private FM radio industry.

If these recommendations are accepted by the Ministry of Information and Broadcasting (I&B), private FM radio companies will be able to broadcast news capsules.

Trai has suggested that the FM radio companies that air news should be allowed an FDI cap of 26 per cent, while those which do not broadcast news may be allowed an FDI of up to 49 per cent (the present cap is 20 per cent).

This suggestion has, however, come with a rider that the news content should be sourced from All India Radio (AIR), Doordarshan, authorised news channels or news agencies like PTI and UNI.

Another significant recommendation is changing the unit for licensing from city to district. The government issues FM radio licences city-wise. Trai wants these to be issued district-wise.

"This will enhance the area of operation of broadcasting and lead to coverage of a larger population. This again will result in reduction in the cost of operations for the broadcasters," Trai said in its recommendations.

About 500 FM stations in the third phase of FM radio expansion are in small towns, which are not considered financially viable by big FM radio companies.

To encourage the companies to bid district-wise, Trai has suggested that only those companies that own at least three FM radio licences in a district should be allowed to bid for other districts.

Trai has also suggested withdrawal of the ceiling on the number of FM radio stations a company can own.

According to the existing rules, no single FM company can own more than 15 per cent of total FM channels in the country. This move will encourage FM radio operators' bid for more FM stations.

The government has issued 266 FM radio licences so far. Of these, 183 stations are operational. Trai has proposed opening of about 700 FM stations across 237 towns in the next phase.

Trai has also recommended lowering the annual fees by 50 per cent from the existing permission holders for private FM radio broadcasters in the North-East and Jammu and Kashmir for an initial period of three years.