Reserve Price For Auction Of FM Radio Channels

The Telecom Regulatory Authority of India on October 16, 2019 released a consultation paper on Reserve Price for auction of FM radio channels. This was in response to MIB seeking recommendations of TRAI on reserve prices for 283 cities (260 new + 23 existing), under FM Phase-Ill policy including factoring in various issues like inflation, indexation of reserve prices worked out in the years from 2011 to 2015, including the reasons for the same as also reasons for variations from earlier recommended reserve prices. Comments on the consultation paper had been sought by TRAI from stakeholders.

MIB has sought TRAI’s recommendations on reserve prices of 283 cities which include 260 new cities and 23 existing cities. The 260 new cities include 10 cities of border areas of J&K and NE states. As per Phase-III policy guidelines cities in border areas with a population less than one lakh are classified in Others category and reserve price for cities in this category is fixed at Rs 5 lakh.

Out of 260 new cities, 155 new cities were identified by MIB in 2011 in Phase-III policy and have not been put to auction yet; 37 new cities were identified by MIB in 2014 on the basis of the 2011 census data and have not been put to auction yet; 41 new cities were put to auction in Phase-III in 2016, but no bids were received in these cities; and 27 new cities were put to auction in Phase-III in 2016, wherein all the channels were not bid. Out of 23 existing cities, auction has already taken place in Phase-III in 16 cities whereas in remaining seven exiting cities no auction has taken place in Phase-III. Reserve prices for 16 existing cities were fixed by MIB in accordance with provisions of Phase-III policy guidelines. Out of 16 existing cities where auction has taken place in Phase-III, in two cities successful bid amount was higher than the reserve price for those cities and in 11 cities successful bid amount was 11 equal to the reserve price for those cities. No bids were received in three cities. The 23 exiting cities have 1 channel available in each city.

Recommendations are awaited from TRAI.