The process of second round of licences is likely to begin post
July by when the government expects the first round of licencees
would have started their operations in various part of the country.
According to a senior information and broadcasting ministry official,
the second round of FM radio licences would be given out after the
process is initiated post July, by when other aspects of the licensing
would also be finalised.
The official also indicated that if the government goes in for
revenue sharing during the second round of licencing, a migration
package, a la telecom, would be devised for the existing players
Licence holders, including MBPL-Star, Radio Mirchi from the Times
group and Radio Today from the India Today Group are expected to
start their operation in Delhi soon
In recent times the private radio FM players have been grumbling
that the losses have been increasing, owing to high licence fee
(given out after an open auction) and low revenues.
Radio City chief Sumantra Dutta had told indiantelevision.com several
months back that if the losses keep mounting then its associate,
MBPL, may have to give up the licence in cities like Lucknow, Prime
Minister's Vajpayee's consituency. Radio City had paid Rs 750 million
towards the license fee and the station doesn't make more than Rs
1 million per month.
Meanwhile, the private FM radio stations submitted their balance
sheets to India's information & broadcasting ministry on 16 April
and, according to government sources, the industry has reported
a combined loss of Rs 1.2 billion against revenues of Rs 0.5 million.
The industry had made a presentation to the I&B minister Ravi Shankar
Prasad in the first week of this month. In their presentation, the
industry had advocated for shifting towards a revenue sharing model
and relaxation on license fee payment. The industry had claimed
that the revenues are not adequate and hence, the high license fee
is not justified. The ministry had asked them to present their financial
reports in two weeks time to support their cause.
The FM players are required to submit the license fee for the second
year by the 30 April. If the ministry fails to come to a mutual
agreement with the private FM industry on time, the industry had
pointed out that some of the smaller players may have to shut down
operations very soon.