Second phase of FM radio starts rolling

NEW DELHI: Over 100 applications have been made to the government, seeking entry to the second phase of private FM radio service.

Among those who have submitted their pre-qualification bids, include Music Broadcast Private Ltd (MBPL), Bennett Coleman, Hindustan Times, Bhaskar group, Jagran group and Reliance, among others. The deadline for submitting pre-qualification bids was Friday.

While only 42 applications had come in till Thursday, the rest were submitted on Friday. The government has thrown open the second phase of FM radio for 338 frequencies (radio stations) across 91 cities. 

Technical evaluation of these bids, including security clearances from the home ministry, will take around two months, it is learnt.

Financial bids have to be submitted in January. While the last date for financial bids for the ‘A plus’ and ‘A’ category cities (big cities across the country) is January 6, for cities and towns in the north, the deadline is January 13. For eastern Indian cities and towns, the deadline is January 20, for western cities, it is January 27, and for the south, it is February 3.

Every applicant and related entities must bid for only one channel per city, as per the tender document.

Also, channels allocated to an applicant and related entities should not exceed 15% of the total number of channels in India. Subsidiaries of applicants in the same city will be disqualified, and so will be the holding company of the applicant company in the same city.

Foreign investment will be restricted to 20% of the paid-up equity of the company. Also, one Indian entity must hold more than 50%, excluding the equity held by scheduled banks and other public financial institutions. All directors on board must be Indians, as per the tender. Even all the key executive officers of the applicant entity must be resident Indians.

Financial bids will have a one-time entry fee, deposit of an amount equivalent of 50% of financial bid, and performance bank guarantee in favour of the I&B ministry equivalent to 50% of financial bid. To apply for all categories of cities, a company must have a net worth of Rs 10 crore, for A plus and A class cities Rs 3 crore, for B category, Rs 2 crore; for C class, Rs 1 crore; and for D class, Rs 50 lakh.

Making a shift from a licence era to revenue-sharing, the government has specified the annual revenue share at 4% or 10% of the reserve one-time-entry-fee (OTEF) for a city, whichever is higher. Annual fee will be paid on quarterly basis.

While FM bidders must operationalise within 18 months of issue of LoI, they may need to opt out in case of delay. But, the tender has stated, “in the event of default in operationalisation of a channel being attribuateble to delay beyond reasonable period by Becil/Prasar Bharati, WPC, the prescribed time limit will be extended.” Co-location on Prasar Bharati towers is mandatory for FM companies, and Becil, a PSU under the I&B ministry, will integrate the infrastructure for radio operations.

As for content, news and current affairs will not be allowed, and 50% of programming on a channel must be produced in India, according to the FM tender.

The first phase of FM radio privatisation took off five years ago.