MUMBAI: Even as the industry rejoices over the progress being made on the much awaited FM Phase III auctions, senior sources from the industry claim that the truth is far from positive and the environment is still not conducive for the auctions to be held.
As reported by Radioandmusic.com earlier, the Empowered Group of Ministers (EGoM) had given the green signal to the auction, and that the EGoM unanimously decided to refer some issues relating to fees to the Telecom Regulatory Authority of India (Trai).
While radio players have taken this in their stride, many are still concerned about the underlying issues haunting the auctions. High reserve fees, ascending e-auction methodology and licenses are just some of the issues that are yet to be resolved keeping in mind the current stature of the radio industry.
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Speaking with Radioandmusic.com, a senior industry official said, “The issues regarding the ascending e-auctions have not been sorted out yet. The Ministry is working out the present license fees, as otherwise the e-auctions will fail just like the telecom auctions. Trai is busy with telecom; they do not have time to settle issues in broadcasting, why will they even look at radio.”
Another issue that is apparently creating confusion is where players were required to get their licenses extended, but since the Ministry is consulting the Trai on some aspects, the procedure is currently held up.
The source states that just the call for auctions is not enough, the Ministry needs to make sure they succeed as well. The success rate is in turn determined by how the auctions are conducted, if the issues are resolved.
“We can all see that the environment is not conducive for the auctions as nobody is putting in money in the industry. There are no investors so it’s turning out to be a lull situation. On the other hand, the Ministry is saying the auctions will be held this year. How? It’s a Catch 22 situation as the bank will not give a loan till players know for how long they want to do business. Here, no one is sure about anything yet,” the source added.
Countering off the allegations, Association of Radio Operators for India secretary general Uday Chawla said, “There is nothing like that. Most of the issues have been resolved. There were targets which the Ministry had to fulfill within a certain time frame and they have been successful at doing that.”
Speaking at the Ficci Frames last month, Information and Broadcasting Ministry (I&B) secretary Uday Kumar Varma had stated, “ EGoM has recently decided to go ahead with the auctioning of 839 new FM channels to 295 cities and we will issue auction guidelines soon. I think we all can imagine the kind of impact it will have on the media industry once close to 839 channels are launched and I think this will completely transform the industry of the country.”
The guidelines for the auctions are set to be issued soon, and will help the government garner revenues to the tune of Rs 1,500 crore. The Phase I and Phase II auctions led to total revenue accrual of about Rs 1,733 crore up to 31 May, 2011 from one time entry fee, migration fee and annual fee amongst others, he added.
Moreover, Finance Minister P Chidambaram in his Budget speech had announced that around 839 new FM radio channels will be auctioned in 2013-14 and said the government proposes to expand private FM radio services to 294 cities. All cities having a population of more than 100,000 will be covered by private FM radio services.
With confusions still reigning in the methodology, the run up to the auctions will be the key to determine its success or failure with the large number of radio players having massive plans.
