Satellite radio service may get costlier for consumers once WorldSpace, the only satellite radio company in the country, is asked to pay license fee as well as share up to 20 per cent of its annual revenue with the government.
These proposals, among others, are part of an overall satellite radio policy draft, currently being considered by the Ministry of Information and Broadcasting.
In the absence of any policy on satellite radio, WorldSpace does not pay licence fees or shares revenue with the government.
According to sources, the draft satellite radio policy includes imposition of a one-time entry fee for satellite operators, up to 20 per cent revenue-sharing arrangement with the government, a 26 per cent cap on foreign direct investments for broadcasting news and current affairs.
This move is seen by industry observers as a step from the government to boost the expansion of the private FM radio network. The broadcast of news and current affairs is still not allowed on private FM radio.
Even the radio forum of industry body Ficci has asked the I&B ministry to promote private FM radio over satellite radio.
In its recommendations, Ficci Radio Forum has asked the I&B Minister Priyaranjan Dasmunshi for imposing a 4 per cent revenue sharing arrangement on subscriptions and 20 per cent share in its advertising revenue, annually.
While an FM radio station works only in the range of 70-100 kilometres, a satellite radio service can be received on special radio sets direct via satellite, anywhere.
WorldSpace radio has about 60,000 subscribers from its 10-city operation. Consumers can obtain the service by paying for the satellite radio sets (costs between Rs 1,800 and Rs 3,000) and subscription fees (Rs 1,700 per year).
In contrast, FM radio sets come as low as Rs 50-100. The FM radio companies have to pay a license fee and share 4 per cent of their annual revenue with the government. For the second phase expansion of private FM radio, the government collected Rs 907 crore in license fee for 266 frequencies.
The government is also considering disallowing WorldSpace the use of repeater network.
A repeater network transforms a satellite radio service to a primarily terrestrial service fed from satellites, thereby competing with FM radio stations.
