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TRAI seeks stakeholders’ views on reserve price for auction of FM Radio channels

Trai issued a consultation paper of Wednesday, asking for views of the various stakeholders involved on whether they agree with the methodology adopted by the telecom regulator for valuation of FM Radio channels.

, ET Bureau|
Updated: Oct 16, 2019, 10.12 PM IST
MUMBAI: The Telecom Regulatory Authority of India (TRAI) has initiated consultation process for determining reserve prices for auction of FM Radio channels in 283 cities (260 new + 23 existing), under FM Phase-III Policy.

The sector regulator issued a consultation paper of Wednesday, asking for stakeholders’ views on whether they agree with the TRAI’s methodology for valuation FM Radio channels.

TRAI has stated that the FM Radio sector has undergone changes in terms of technology and behaviour of radio listeners, who – especially the young generation – are opting for online platforms like, for listening to music.
Additionally, as many new smart phones do not have inbuilt FM Radio receivers, in such a scenario, the revenue stream of FM Radio broadcasters may get impacted due to possible reduction in number of listeners.

“This may require a review of the methodology adopted in 2015 by TRAI for valuation of FM radio channels and the variables – population, per capita income, listenership of FM Radio, and per capita gross revenue (GR) earned by existing FM Radio operators – and their values considered at that time.

TRAI has asked stakeholders if the highest bid price received for the auction of frequencies in a city in Phase-II should be continued to be used as the reserve price for the existing cities with regards to the 23 existing cities, or some other methodology needs to be used for setting the reserve price.

Also, for new cities, TRAI has asked if earlier variables are adequate to determine valuation and what additional variables should be considered for the same.

The move is in response to the Information and broadcasting ministry’s letter to TRAI, wherein the regulator was asked for its recommendation on reserve prices for auction of radio frequencies in the third batch of phase III auctions.

As per Phase-III policy guidelines, reserve price for new channels in existing FM Phase-II cities was fixed as the highest bid price received for that city in Phase-II.

Incidentally, in Phase-III expansion of FM radio, a total of 966 FM radio channels were made available for auction, out of which only 162 channels could be auctioned by the I&B ministry in two batches, indicating that it will be required to auction remaining 804 FM radio channels.

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