Press Release

Phase III FM Radio Auctions Set to Cross Rs. 1000 Crore

Information and Broadcasting Ministry Invites Application for e-auction of 266 FM Radio Channels in 92 Cities

According to recently released report by TechSci Research “India FM Radio Market By Type (Traditional FM Radio, Internet FM Radio), By Sector (Retail, Real Estate, Automobile, Education, Others), By Ownership (Public and Private), By Region (North, East, West, South) Forecast & Opportunities, 2011-2021” FM Radio market is currently witnessing the exponential growth on the back of increasing expansion initiatives of FM Radio channels supported by the government, growing advertisement spending of brands to reach to the diverse customer base, increasing use of internet radio, and so on. Internet radio is relatively new concept to the India FM Radio ecosystem which helps the FM Radio companies to reach to diverse geographies. With the increasing internet penetration in the country more and more people are listening music via internet. Further, the growing smartphone user base which is expected to cross 390 million by 2021 is driving the internet FM radio market in the country.

Information and Broadcasting Ministry, Govt. of India announced roll-out of e-auction for 266 FM Radio Channels in 92 cities under the second batch of FM Phase III expansion plan. The aim of the expansion plan is to provide FM Radio services in small towns and cities across India including the border areas of Jammu and Kashmir, and Northeast states such as Tripura, Nagaland, Assam, Meghalaya and Mizoram. The second batch consists of 227 channels in 69 new cities and 39 channels in 23 existing cities in the country.

The rollout includes five categories – Category A (with population above 20 lakhs), Category B (with population above 10 lakhs and up to 20 lakhs), Category C (with population above 3 Lakhs and up to 10 Lakhs) and Category D (with population above 1 Lakhs and up to 3 Lakhs) and Others (Cities with a population up to 1 Lakhs).

Among 92 cities, 2 cities fall under Category B; 37 cities with 111 channels are under Category C; 41 cities with 117 channels have a population of 1-3 lakhs; and 33 channels are allocated to small towns in Jammu Kashmir and North Eastern states which have a population of up to 1 lakh. Hyderabad is the only metro which would form a part of this auction.

The ministry issued a notice regarding e-auction of the second batch of FM Phase III expansion plan on 20th June, 2016. The last date of submitting the application is 1st August, 2016 and applicants have to submit the ownership details by 16th August, 2016. On 22 August, 2016, Bidder Ownership Certificate would be issued, followed by pre-qualification of bidders on 1st September, 2016.

Ministry of Information & Broadcasting has set certain eligibility criteria for the bidding process. According to the set criteria, those companies are eligible for bidding and obtaining permission for operating FM Radio channels which are registered in India under the Companies Act, 2013 or Companies Act, 1956.

Further, companies have to provide the details of total direct and indirect foreign investments to the ministry and it shall not exceed 26% at the time of application. Moreover, the companies participating in the bidding process should have the following minimum net worth:

Minimum Net Worth Criteria for an Applicant

Categories

Net Worth

D Category Cities and cities with population up to 1 lakh

INR 50 Lakhs

C Category Cities

INR 1 Crore

B Category Cities

INR 2 Crore

A Category Cities

INR 3 Crore

All Categories of Cities in all regions

INR 10 Crore

Note: For two or more C category cities in the same region, Net Worth of INR 1 Crore is required. If the two C category cities are in two different regions, Net Worth of INR 2 Crore is required.

Source: Ministry of Information & Broadcasting, Government of India

 

Further, the ministry stated that the Indian shareholder should have 51% equity share in the company excluding the equity share held by scheduled banks and public financial institutions, and the largest shareholder would have the control over the applicant entity. Further, the company’s all board of directors, channel head, CEO, and all key executives should be residents of India.

Ministry of Information and Broadcasting has also set a non-refundable application processing fees of INR 25,000.

Interested companies can secure the copy of the notice (N-38014/31/2016-FM) and related documents from www.mib.nic.in.

TechSci Research report estimates that the Ministry of Information and Broadcasting would generate at least Rs. 1000 crore after successful completion of Phase III expansion plan.

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The ministry would also be able to generate revenues from the private companies in the form of annual fee charged to the channel company, which is 4% of the Gross Revenue of its FM radio channel for the financial year or 2.5% of Non-Refundable One Time Entry Fees for the concerned city, whichever is higher. However, for the North eastern states, the government of India has fixed the fee of 2% of Gross Revenue annually or 1.25% of Non-Refundable One Time Entry Fees for the concerned city, whichever is higher, for first three years from the date annual license fee is payable.

Further, with the expansion of FM Radio in 69 new cities and 23 existing cities, India FM Radio market is expected to witness an exponential growth in the coming years, with FM Radio companies witnessing increase in their revenues from advertisements by on-boarding new customers as well as by providing wider geographical reach to their existing clientele.

List of Cities, By State and Number of FM Radio Channels for Auction

S. No.

City

State

Number of Channels for Auction

Category

1

Hyderabad

Telangana

1

Category A

2

Asansol

West Bengal

2

Category B

3

Vijayawada

Andhra Pradesh

2

Category B

4

Akola

Maharashtra

1

Category C

5

Alappuzha

Kerala

4

Category C

6

Amravati

Maharashtra

4

Category C

7

Belgaum

Karnataka

4

Category C

8

Bellary

Karnataka

4

Category C

9

Bhavnagar

Gujarat

4

Category C

10

Dehradun

Uttarakhand

4

Category C

11

Devengeri

Karnataka

4

Category C

12

Dhule

Maharashtra

2

Category C

13

Erode

Tamil Nadu

4

Category C

14

Gulbarga

Karnataka

3

Category C

15

Hubli-Dharwad

Karnataka

4

Category C

16

Jamnagar

Gujarat

4

Category C

17

Jhansi

Uttar Pradesh

2

Category C

18

Kakinada

Andhra Pradesh

4

Category C

19

Kurnool

Andhra Pradesh

4

Category C

20

Malegaon

Maharashtra

4

Category C

21

Mangaluru

Karnataka

1

Category C

22

Muzaffarpur

Bihar

1

Category C

23

Muzaffarnagar

Uttar Pradesh

4

Category C

24

Mysuru

Karnataka

2

Category C

25

Nanded

Maharashtra

2

Category C

26

Nellore

Andhra Pradesh

4

Category C

27

Puducherry

Puducherry(UT)

1

Category C

28

Rajahmundry

Andhra Pradesh

3

Category C

29

Saharanpur

Uttar Pradesh

4

Category C

30

Salem

Tamil Nadu

4

Category C

31

Sangli

Maharashtra

1

Category C

32

Shahjahanpur

Uttar Pradesh

4

Category C

33

Siliguri

West Bengal

1

Category C

34

Tiruchy

Tamil Nadu

2

Category C

35

Tirunelveli

Tamil Nadu

2

Category C

36

Tirupati

Andhra Pradesh

2

Category C

37

Tuticorin

Tamil Nadu

2

Category C

38

Ujjain

Madhya Pradesh

4

Category C

39

Vellore

Tamil Nadu

4

Category C

40

Warangal

Telangana

3

Category C

41

Achalpur

Maharashtra

3

Category D

42

Agartala

Tripura

1

Category D

43

Aizwal

Mizoram

1

Category D

44

Barshi

Maharashtra

3

Category D

45

Bharuch

Gujarat

3

Category D

46

Botad

Gujarat

3

Category D

47

Burhanpur

Madhya Pradesh

3

Category D

48

Chhattarpur

Madhya Pradesh

3

Category D

49

Chhindwara

Madhya Pradesh

3

Category D

50

Damoh

Madhya Pradesh

3

Category D

51

Dahod

Gujarat

3

Category D

52

Durg Bhillainagar

Chhattisgarh

3

Category D

53

Godhra

Gujarat

3

Category D

54

Gondiya

Maharashtra

3

Category D

55

Guna

Madhya Pradesh

3

Category D

56

Itanagar

Arunachal Pradesh

1

Category D

57

Itarsi

Madhya Pradesh

3

Category D

58

Jagdalpur

Chhatisgarh

3

Category D

59

Jetpur Navagadh

Gujarat

3

Category D

60

Junagadh

Gujarat

3

Category D

61

Khandwa

Madhya Pradesh

3

Category D

62

Khargone

Madhya Pradesh

3

Category D

63

Korba

Chhatisgarh

3

Category D

64

Mehsana

Gujarat

3

Category D

65

Mandsaur

Madhya Pradesh

3

Category D

66

Murwara

Madhya Pradesh

3

Category D

67

Neemuch

Madhya Pradesh

3

Category D

68

Palanpur

Gujarat

3

Category D

69

Patan

Gujarat

3

Category D

70

Porbandar

Gujarat

3

Category D

71

Raigarh

Chhatisgarh

3

Category D

72

Ratlam

Madhya Pradesh

3

Category D

73

Rewa

Madhya Pradesh

3

Category D

74

Satna

Madhya Pradesh

3

Category D

75

Shivpuri

Madhya Pradesh

3

Category D

76

Singrauli

Madhya Pradesh

3

Category D

77

Surendranagar Dudhrej

Gujarat

3

Category D

78

Veraval

Gujarat

3

Category D

79

Vidisha

Madhya Pradesh

3

Category D

80

Wardha

Maharashtra

3

Category D

81

Yavatmal

Maharashtra

3

Category D

82

Kargil

Jammu & Kashmir

3

Cities in Border Area of J & K and NE states

83

Leh

Jammu & Kashmir

3

Cities in Border Area of J & K and NE states

84

Kathua

Jammu & Kashmir

3

Cities in Border Area of J & K and NE states

85

Poonch

Jammu & Kashmir

3

Cities in Border Area of J & K and NE states

86

Bhaderwah

Jammu & Kashmir

3

Cities in Border Area of J & K and NE states

87

Dubhri

Assam

3

Cities in Border Area of J & K and NE states

88

Haflong

Assam

3

Cities in Border Area of J & K and NE states

89

Jowai

Meghalaya

3

Cities in Border Area of J & K and NE states

90

Lung-lei

Mizoram

3

Cities in Border Area of J & K and NE states

91

Mokukchung

Nagaland

3

Cities in Border Area of J & K and NE states

92

Belonia

Tripura

3

Cities in Border Area of J & K and NE states

Source: Ministry of Information & Broadcasting, Government of India

 

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