NEW DELHI: The government is likely to collect Rs. 13.5 billion as one-time entry fee for the licences for 338 FM radio stations in 91 cities, the bidding for which starts on 6 January 2006.
This is nearly half of the total investment of Rs. 26 billion the phase II of FM licensing will attract. Additionally, the government may earn a revenue of over Rs. 500 million per year through the four per cent revenue share scheme it announced in July last year.
These are the findings of a study carried out by Big River Radio, a leading consulting firm of India engaged in handing out advises for setting up and managing radio stations based on the business models being followed by a large number of bidders for FM stations spread across the country.
The successful bidders, who are required to put up their infrastructure for the services, will be investing Rs.12, 000 million on transmitters, studio equipment and common transmission facilities essential for the mandatory co-location.
Around 90 per cent of the equipment for the infrastructure will be imported, mostly from the US and Europe, Big River stated in an official statement today.
The FM radio operators will be using the Prasar Bharati towers in 84 cities for co-locating their transmitters. The public service broadcaster is likely to earn Rs. 700 millions from providing these services to the private sector.
The infrastructure in the remaining seven cities will be created by the ministry of information and broadcasting in the next two years. Till such time, the government has allowed the successful bidders in these cities to operationalise their channels on an individual basis.
Referring to the study, Big River Radio (India) Private Limited MD Sunil Kumar said in a statement, “The study involved in-depth analysis of the workings of broadcasters in India and others countries – primarily the mature radio markets like the UK and the US.
“Our findings are based on several months of deliberations with a large number of these bidders who are serious about the business and get into the bidding hall with a fairly well worked out and detailed business plan”