The Telecom Regulatory Authority of India (TRAI) has today issued its recommendations on “Reserve Prices for auction of FM Radio channels in new cities”.

 

The Ministry of Information and Broadcasting (MIB) sent a reference dated 16^th December 2014 to TRAI, seeking recommendations of the Authority on reserve prices for auction of FM Radio channels in 264 new cities as per the Phase-III policy guidelines. In all 831 FM Radio channels in these cities are proposed to be auctioned through an ascending e-auction process as provided in Phase-III policy. The list of cities with corresponding category and the number of channels being put up for auction were provided by MIB.

 

Out of 264 new cities, 253 cities have a population more than 1 lakh as per census data 2011 and are classified as B, C, and D category cities. There are 798 FM Radio channels in these 253 cities which are proposed to be put up for auction. The remaining 11 cities having a population less than 1 lakh are in the border areas of Jammu & Kashmir (J&K) and the North East (NE) region. There are 33 FM Radio channels in these 11 cities which are proposed to be put up for auction.

 

TRAI issued a consultation paper on “Reserve Price for auction of FM Radio channels in new cities” on 6^th February, 2015. Written comments were invited from stakeholders by 25^th February, 2015. All the comments received were posted on the TRAI website. Subsequently, an Open House Discussion was conducted by TRAI with all the stakeholders on 9^th March, 2015 at New Delhi.

 

After considering all comments received from stakeholders during consultation process and further analysis of the issues, the Authority has finalised its recommendations. The salient features of the recommendations are given below:

 

1. The valuation of FM radio channels in 253 new cities has been worked out as a simple mean of the three valuation approaches. The approaches are based on the following variables:
2. Population of the city
3. Per capita Gross State Domestic Product (GSDP)
4. Listenership of FM Radio
5. Per capita Gross Revenue earned by the existing FM Radio operators
2. The reserve price for FM radio channels for each of the 253 new cities has been fixed at 80% of the valuation for each city.

iii)    The recommended reserve prices for FM radio channels in 253 new cities are given in Annexure-I.

iv)    For 11 cities of ‘Others’ category, having a population less than 1 lakh in the border areas of Jammu & Kashmir (J&K) and the North East (NE) region, the reserve price is kept as ₹ 5 Lakh for each channel of each city, as approved by the Cabinet in the Phase-III policy.

 

The full text of recommendations is available on TRAI’s website www.trai.gov.in.

 

Click here to see Annexure:

Reserve price methodology for FM radio auctions set by valuation mean, with fixed floor for border region channels. TRAI recommends that valuation for FM channels in 253 new cities be the simple mean of three approaches based on population, per capita GSDP, FM listenership and per capita gross revenue, and that the reserve price for each such city be fixed at 80% of that valuation; for 11 border cities with population below 1 lakh a fixed reserve price as approved in Phase III policy is applied.