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The third phase of the FM radio auctions is stuck in limbo. Already delayed by three years, the auctions were supposed to be held in the October-December quarter but the industry is yet to get a confirmation on the date.
“We have heard nothing from the ministry (of information and broadcasting). We have not been told whether or not the auctions will take place, but going by the fact that the advertisement for the auctions is not yet out, it seems difficult for them to be carried out by December 31 or even March 31 next year,” said Apurva Purohit, CEO, Radio City.
The former minister of state for the information and broadcasting ministry, Prakash Javadekar had assured in September that the auctions would take place by February 2015. However, after that, Javadekar was replaced by Arun Jaitley, with Olympian shooter Rajyavardhan Singh Rathore as the minister of state.
“What is unacceptable is this uncertainty. There is absolutely no clarity. On one hand, the minister (Jaitley) says he would like to hold the auctions before March 31 so that the revenue can be booked in the current financial year, and on the other hand, the basic queries like the format of the auction have not been addressed,” said a top management executive from another private FM radio channel.
The radio stations have sent queries to the ministry which deal with the format (whether it will be zonal and what the zones would be) of the auction. These queries now lie with the Telecom Regulatory Authority of India (TRAI), which is yet to revert with its suggestions.
The third phase of the radio auctions will expand the presence of FM radio to 839 new stations in 294 cities. Time is of essence now since the existing licenses for the radio stations expire on March 31 next year. While there is no clarity on the auctions taking place, radio station owners are now urging the ministry to extend the current licenses at the earliest so that business can go on as usual.
“If there is going to be a delay in holding the auctions, it’s fine. But then, we need to promptly move on to plan B which is getting the current license extensions in place. Going by the looks of it, an extension of at least a year would be needed. Business needs to go on and license extension will be paramount for it,” adds Purohit.
The phase three auction policy also has the provision for migrating (transferring) the current licenses to the phase three of private FM radio expansion. The formula has been worked out and approved by TRAI and the ministry. In the event of the auctions not taking place by 31 March, 2015, there is no provision as yet to extend the current licenses, and hence the urgency on behalf of the radio stations.
Earlier this year, the government called for RFP’s (request for proposal) from e-auctioneers for the third phase of private FM radio expansion. It also appointed a supervisor from to oversee the process.
In the meantime, Radio City’s plans for an initial public offering (IPO) have also been delayed.
“We have maintained that we will file for an IPO once the bidding is done. Since the bidding is delayed, the filing has also been delayed,” said Purohit.
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