Government notifies FM phase-II norms; minimum net worth of bidders laid down

NEW DELHI: The government, while formally notifying the policy for the second phase of expansion of FM radio broadcasting services through private agencies, has laid down some financial yardsticks, including minimum net worth of companies bidding for licences.

Since companies will be eligible to participate in bidding for channels in all the four regions, their financial competence shall be assessed on the basis of the following indicative criteria (minimum net worth required for one channel per center in all regions):

D category centers: Rs 5 million

C category centers: Rs 10 million

B category centers: Rs 20 million

A or A+ category centers: Rs 30 million

All centers: Rs 100 million.


The government, in a statement issued yesterday, also said that each company would have to intimate in writing the maximum number of channels in different categories of cities it desires to bid for and its eligibility will be determined accordingly.

In case the applicant does not wish to intimate these details, the applicant company should have the minimum net worth of Rs 100 million.

A senior government official told that the financial yardsticks have been put in to weed away non-serious bidders, which may later lead to litigation.

As in the phase-I, the objectives of phase-II shall be to attract private agencies to supplement and complement the efforts of All India Radio by operationalising radio stations that provide programmes with local content and relevance, improve the quality of fidelity in reception and generation, encouraging participation by local talent and generating employment, the

information and broadcasting ministry said.

Some of the salient features of the new policy, reported earlier, are as under:

    Permission shall be granted on the basis of one-time entry fee (OTEF) quoted by the bidders through closed tender system. The I&B ministry of I&B would separately issue detailed tender notice in due course enabling the interested parties to participate.

    The process of granting permission for new participants under Phase 2 shall consist of two rounds. The first round shall be for pre-qualification and only applicants qualifying in accordance with prescribed eligibility criteria will proceed to the next round for making financial bids for specific channels in different cities.

    Participants of Phase 1, who exercise their option to be considered for Phase 2, including those licensees who are eligible for automatic migration for channels already operationalised by them, shall be eligible to be considered for the pre-qualification round for fresh tendering under Phase 2, but subject to their fulfilling the prescribed eligibility criteria.

    Only companies registered under the Indian Companies Act, 1956 shall be eligible for bidding and obtaining permission for FM Radio channels.

    Bidding will be conducted at Delhi, Mumbai, Kolkata and Chennai for the respective four regions of the country with dates fixed at weekly intervals.

    Every pre-qualified applicant may apply for allotment of only one channel in each city through a separate financial bid for payment of OTEF for each channel.

    Annual fee shall be charged at four per cent of gross revenue for the year or at 10 per cent of the reserve OTEF limit for the concerned city, whichever is higher. Gross Revenue for this purpose would be the gross revenue without deduction of taxes.

    Every applicant shall be allowed to run only one channel per city provided the total number of channels allocated to the entity is within the overall ceiling of 15 per cent of all allocated channels in the country.

    No company shall hold permission for more than 15 per cent of all channels allotted in the country. In the event of allotment of more channels than prescribed, the entity will have the discretion to decide which channels it would like to surrender and the government shall refund its OTEF for these channels in full.

    News and current affairs programs are not permitted on private FM radio stations.

    Every permission holder shall follow the AIR's programme and advertising code as amended from time to time.

    In the event of the government announcing the setting up of a broadcast regulatory authority, whatever it may be christened, and the content regulations are modified, the permission holder shall be obliged to conform to the revised guidelines.

    Foreign investment, including FDI, FIIs, non-resident Indians and overseas corporate bodies, is capped at 20 per cent

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