The 29 December deadline for payment of license fees by private FM radio players in metros has been extended by eight months, costing the national exchequer a "notional loss of Rs 46 million".

The decision to defer the roll out of services, announced by I&B minister Sushma Swaraj over the weekend, was prompted by technical problems related to co-location in Delhi, Kolkata and Chennai where players have entered into an agreement with AIR for the use of its transmission towers. In Mumbai, where neither DD nor AIR have towers, private players have been exempted from the condition of co-location for a period of two years and have been allowed to make interim individual arrangements within the next four months. After that, operators will be required to start paying license fees, whether services start or not.

Players in the non metro cities on the other hand, have been given a seven-day ultimatum to either pay their license fees or forfeit their bank guarantees, which is equivalent to the first year's fee. FM licenses have been given for 37 stations, of which 19 are in the metros. As per the license agreement for the metros, the FM licensees agreed to 'be part of the consortium of all licensees in each center and install transmission facilities at a single location and share the transmission resources.' The consortium, however, could not be formed as some prospective players went to court alleging changes in licensing conditions after the bids. Those who did not seek legal recourse were allowed to form a consortium five months ago. In Delhi, Chennai and Kolkata, FM players signed an agreement earlier in December with pubcaster Prasar Bharati for use of AIR transmission towers to collocate their transmitters. However, the government realized at the end of the month that AIR itself would take four months to upgrade its towers, and another four months would be needed for the licensees to start their services.

The annual license fee for all the 37 stations spread across 19 cities totals Rs 1587.2 million. The licensees include the Times Group's Bennett, Coleman and Co. (12 stations), Star India-Ispat group's Music Broadcast (six stations), The India Today Group's Living Media (three stations), Vertex Broadcasting of the Dabur Group, Millennium Broadcast (three stations), Midday (three stations) and Udaya TV (one station). Private FM players, however, will not be allowed to broadcast news and current affairs programmes.