New Delhi: A fresh approval of the union cabinet will be sought for the maiden e-auction of Phase III of FM Radio licences as certain new aspects have come to light after the earlier clearance.

The Information and Broadcasting Ministry has prepared a note that encompasses the news aspects and circulated it to the concerned ministries/departments for their views, before it is put up for approval of the cabinet in the next few weeks.

The Information and Broadcasting ministry has said issues such as charging of migration fee from existing permission holders, and specific departures in the Requests for Proposals (RFP) from agencies interested in conducting the e-auction on behalf of the ministry, had not been taken into account when the cabinet approval for the Phase III auctions were obtained on 7 July last year.

The issues relating to the e-auction were pointed out by the inter-ministerial committee set up in November last year and headed by the then additional secretary in the I&B Ministry Rajiv Takroo.

The nine-member committee, with I&B joint secretary - broadcasting Supriya Sahu as the member-secretary, was set up to ‘guide and supervise the process of e-auction and grant of licences to private parties‘ in Phase III.

Meanwhile, the ministry has decided to commence work on the e-auctions and has called for tenders. The pre-qualification of the bidders is expected to be completed in about another two months, following which the companies that qualify will be allowed to participate in the e-auction for FM radio Phase III licences. The e-auction is expected to begin early next year.

FM Phase III Policy will extend FM radio services to about 227 new cities with a total of 839 new FM radio channels in 294 cities. A total of 216 cities and towns will get private FM radio stations for the first time, out of the 302 identified by the government and split into four categories.

In Phase III, 67 of the 86 cities and towns which already have private FM Radio channels will get additional channels. All cities with a population of 100,000 and above are entitled to get private FM radio channels in Phase III auctions.

The committee was expected to finalise and seek approval for the Request for Proposal document for selection of agency for conducting the e-auction, review the auction framework, finalise the auction documentation, conduct and oversee open house sessions for stakeholders, and guide the agency selected for the e-auction.

A separate Appellate Review Committee was also set up to scrutinize the short-listing of prospective bidders headed by the Additional Secretary and Financial Advisor in the I&B ministry. This committee will scrutinize various details including the net worth of prospective bidders and put them up on the ministry website, scrutinize bank guarantees and oversee the other work in that connection.

Private FM Radio broadcasters in North East (NE) Region and Jammu & Kashmir (J&K) and Island territories will be required to pay half the rate of annual license fee for an initial period of three years from the date from which the annual license fee becomes payable and the permission period of fifteen years begins. The revised fee structure has also been made applicable for a period of three years, from the date of issuance of guidelines, to the existing operators in these states to enable them to effectively compete with the new operators.

Apart from the fee relaxation, Prasar Bharati infrastructure would be made available at half the lease rentals for similar category cities in such areas. The limit on the ownership of channels, at the national level, allocated to an entity has been retained at 15 per cent. However, channels allotted in Jammu & Kashmir, North Eastern States and island territories will be allowed over and above the 15 per cent national limit to incentivise the bidding for channels in such areas.

A total of 245 FM channels are currently operational in 87 cities, each with a population of over 300,000 or more.

Meanwhile, All India Radio (AIR) is working on a plan to increase the coverage of its FM Radio channels from 37 to 90 per cent of the population, in a modernisation programme undertaken since 2011 and expected to be completed by 2016. AIR has already covered 99 per cent of the population with its analogue technology channels.

NEW DELHI: The Indian media and entertainment industry has attracted foreign direct investment (FDI) of Rs 132.02 billion between April 2000 and February 2012, according to a source in the Information and Broadcasting ministry.

This comprises a mere 1.77 per cent of the total FDI inflow into the country during this period, the source said, adding that the proposed hike in the cap would help the sector in a big way to attract foreign capital.

The Telecom Regulatory Authority of India (Trai) has already forwarded to the government its proposal for a relaxation in the FDI inflows which is under the consideration of the government.

FDI in the broadcasting sector is governed by the FDI policy issued by the Department of Industrial Policy and Promotion (DIPP).

The source, however, said a balance needs to be struck to ensure that the domestic sector should not be allowed to suffer because of enhanced FDI into the broadcasting sector.

The FDI in teleport hubs, direct-to-home, cable networks, and multi-system networks are proposed to be raised from the present 49 per cent to 74 per cent if they undertake to upgrade and digitise their systems with addressability. If this is not done, then the limit will remain at 49 per cent.

The FDI for uplinking of news TV channels will remain at 26 per cent, while it will remain at 100 per cent for uplinking of non-news channels and for dowlinking of TV channels.

In the case of mobile television, there is no policy for FDI at present but this is expected to be set at 74 per cent.

Equity up to 49 per cent will be by the automatic route and that beyond 49 per cent and up to 74 per cent will be through the government route.

The route of FDI for FM Radio, and uplinking and downlinking of TV channels will be through the government.

Meanwhile, there is no proposal to increase the foreign participation in the print media which remains at 26 per cent for publishing newspapers or facsimile editions. The government has allowed100 per cent for speciality/technical/scientific magazines in the non-news category.

MUMBAI: The fiscal ended 31 March 2012 has been good for BAG Films and Media, the company that owns and operates Hindi news channel News24 and Bollywood channel E24 apart from FM radio brand Dhamaal24 and TV production business.

E24 has achieved operational break even for the first time, posting a cash profit of Rs 13 million.

Also, for the first time the company?s turnover has crossed the Rs 1 billion mark on a consolidated basis. Revenue grew 55 per cent to Rs 1.17 billion, from Rs 751.93 million in FY?11.

Bag Films is expecting News24 to be cash positive by the end of this fiscal.

?E24 has broken even for the fiscal with a cash profit of Rs 13 million. We expect News24 to also break even this fiscal. The bottom line of the company?s TV broadcasting business is in losses because of distribution expenses,? a senior executive of the company said.

Total income from the TV business stood at Rs 700.91 million, compared to Rs 510.12 million in the previous fiscal. Loss stood at Rs 65.52 million, down from Rs 91.41 million in the previous fiscal.

Meanwhile, the radio business of the company continued to be profitable. Dhamaal24 reported a cash profit of Rs 39.4 million, while revenue stood at Rs 113.1 million.

On a consolidated basis, BAG Films? net loss stood at Rs 69.79 million, compared to a net loss of Rs 265.93 million in the previous fiscal.

Compared to a 55.11 per cent jump in the revenue, expenses during the fiscal also rose 24 per cent to Rs 1.44 billion (from Rs 1.16 billion in FY?11).

The audio visual production business posted segment reported a profit of Rs 95.35 million, compared to a loss of Rs 33.40 million in the previous fiscal. Revenue during the fiscal stood at Rs 362.25 million, from Rs 134.34 million a year ago.

MUMBAI: Former Network18 Group CEO Haresh Chawla will be joining India Value Fund Advisors (IVFA), as India partner.

Chawla will be joining the private equity firm on 1 June. He will be responsible for building and scaling up businesses owned by IVFA across sectors, as well as leading media and entertainment investments at the private equity firm.

IVFA managing partner Vishal Nevatia said, "Haresh brings with him unique experience, having built several world-class brands in the media and entertainment space. He blends professional management with entrepreneurial drive and the combination will be invaluable in helping IVFA scale up and further build our portfolio of businesses."

IVFA controls MBPL, the company which operates FM radio station under the Radio City brand, and Bangalore-based MSO Atria Convergence Technologies. The fund has exited from its two earlier media investments, Shringar Films and DQ Entertainment.

IVFA?s other investments include Meru Cabs, RDC Concrete, InLogistics, Mahindra Hinoday,DM Healthcare and RoboSilicon, amongst others.

On his new role Chawla added, "IVFA is a uniquely positioned firm that not only infuses capital but also the mindset and strategic management thinking, that is required to scale up mid-sized businesses into large professionally-run enterprises. This operating model was particularly appealing to me as a chance to leverage my experience in building up businesses and helping management teams perform to their true potential."

Under Chawla?s leadership, Network18 grew from a single business news channel (CNBC-TV18) and solitary portal (Moneycontrol.com), with revenues of Rs 150 million in 1999, to a diversified media group with revenues in excess of Rs 25 billion in 2011. His previous assignments have all been with start-ups including the HCL Group, where he headed business development for HCL Comnet; ABCL, where he set up the Film Distribution Business, and at the Times of India Group where he launched their music label - Times Music.

NEW DELHI: E-auction for the third phase of FM radio channels will commence in June, Information and Broadcasting secretary Uday Kumar Varma said.

The Union Cabinet had approved auctions for the third phase almost a year back on 7 July 2011, but no date had been fixed.

Private FM radio broadcasters are eagerly waiting for the date announcement as they have to ready capital before that. The bidding could turn aggressive, particularly in the metros where more frequencies will open up.

The government expects to earn Rs 17.33 billion from auctioning the radio licences.

FM Phase-III policy extends FM radio services to about 227 new cities, in addition to the present 86 cities, with a total of 839 new FM radio stations.

The government has hiked the cap on foreign holding from 20 per cent to 26 per cent.

The private radio operators are also allowed to carry news, but only from bulletins of All India Radio (AIR).

FM radio broadcasters are struggling with the slow pace of revenue growth and many of them are in losses. The revenue market for FM radio is estimated at Rs 12 billion.