FM Radio phase III: TRAI to hold Open House on reserve price for auction

NEW DELHI: An Open House meet will be organised on reserve price for auction of FM Radio channels in new cities in Delhi on 9 March.

This follows a consultation paper by the Telecom Regulatory Authority of India (TRAI) on 6 February. It has already received some comments.

TRAI recommended that the reserve price for FM Radio channels in phase III should be 0.8 times of the valuation of FM Radio channels in that city.

The authority body suggested a reserve price of Rs 5 lakh per city, for FM Radio channels in 11 border cities in phase III.

The regulator also asked if stakeholders agree with the proposed approach and methodology for determination of the valuations of FM Radio channels in 253 new cities in phase III.

The Ministry sent a reference dated 16 December, 2014 to the Authority seeking recommendations of TRAI on reserve prices for 831 FM Radio channels in 264 new cities in the phase III. With this, the private FM Radio operations would be permissible in 350 cities.

Comments and views of the stakeholders on the issues related to estimation of the reserve prices for auction of FM Radio channels in new cities were to be sent latest by 25 February.

TRAI said that for FM channels in 253 new cities, the reserve price can be fixed at 80 per cent of the derived valuations.

For 11 new cities classified in the ‘Others’ category, no reference price is available from phase-II as no city was available in this category in that phase. These cities have population figures of less than one lakh and are located in the border areas of Jammu and Kashmir (J&K) and the North- Eastern (NE) States. The Cabinet approved the RP for each of these 11 cities as Rs 5 lakh.

These cities are of strategic importance. The availability of FM Radio broadcasting service in these far-flung areas can also be used for Emergency Warning Services (EWS) with the specific approval and guidance of the local district administration. When the reserve price of Rs 5 lakh per city set for these cities in phase III, the policy is compared with the proposed RPs for ‘D’ category cities of NE and J&K, it appears to be reasonable to encourage the participation of a large number of prospective bidders. The inherent design of an ascending e-auction process would anyway ensure that the true market value of the FM Radio channels in each city is discovered during the process of auction. So the RP for each of these 11 new cities may be Rs 5 lakh.

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