Phase III FM Radio Auctions Set to Cross Rs. 1000 Crore Says TechSci Research Report
NEW YORK, June 29, 2016 /PRNewswire/ --
Information and Broadcasting Ministry Invites Application for e-auction of 266 FM Radio Channels in 92 Cities
According to recently released report by TechSci Research "India FM Radio Market By Type (Traditional FM Radio, Internet FM Radio), By Sector (Retail, Real Estate, Automobile, Education, Others), By Ownership (Public and Private), By Region (North, East, West, South) Forecast & Opportunities, 2011-2021" FM Radio market is currently witnessing the exponential growth on the back of increasing expansion initiatives of FM Radio channels supported by the government, growing advertisement spending of brands to reach to the diverse customer base, increasing use of internet radio, and so on. Internet radio is relatively new concept to the India FM Radio ecosystem which helps the FM Radio companies to reach to diverse geographies. With the increasing internet penetration in the country more and more people are listening music via internet. Further, the growing smartphone user base which is expected to cross 390 million by 2021 is driving the internet FM radio market in the country.
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Information and Broadcasting Ministry, Govt. of India announced roll-out of e-auction for 266 FM Radio Channels in 92 cities under the second batch of FM Phase III expansion plan. The aim of the expansion plan is to provide FM Radio services in small towns and cities across India including the border areas of Jammu and Kashmir, and Northeast states such as Tripura, Nagaland, Assam, Meghalaya and Mizoram. The second batch consists of 227 channels in 69 new cities and 39 channels in 23 existing cities in the country.
The rollout includes five categories - Category A (with population above 20 lakhs), Category B (with population above 10 lakhs and up to 20 lakhs), Category C (with population above 3 Lakhs and up to 10 Lakhs) and Category D (with population above 1 Lakhs and up to 3 Lakhs) and Others (Cities with a population up to 1 Lakhs).
Among 92 cities, 2 cities fall under Category B; 37 cities with 111 channels are under Category C; 41 cities with 117 channels have a population of 1-3 lakhs; and 33 channels are allocated to small towns in Jammu Kashmir and North Eastern states which have a population of up to 1 lakh. Hyderabad is the only metro which would form a part of this auction.
The ministry issued a notice regarding e-auction of the second batch of FM Phase III expansion plan on 20th June, 2016. The last date of submitting the application is 1st August, 2016 and applicants have to submit the ownership details by 16th August, 2016. On 22 August, 2016, Bidder Ownership Certificate would be issued, followed by pre-qualification of bidders on 1st September, 2016.
Ministry of Information & Broadcasting has set certain eligibility criteria for the bidding process. According to the set criteria, those companies are eligible for bidding and obtaining permission for operating FM Radio channels which are registered in India under the Companies Act, 2013 or Companies Act, 1956.
Further, companies have to provide the details of total direct and indirect foreign investments to the ministry and it shall not exceed 26% at the time of application. Moreover, the companies participating in the bidding process should have the following minimum net worth:
Minimum Net Worth Criteria for an Applicant
Categories Net Worth
D Category Cities and cities with population up to 1
lakh INR 50 Lakhs
C Category Cities INR 1 Crore
B Category Cities INR 2 Crore
A Category Cities INR 3 Crore
All Categories of Cities in all regions INR 10 Crore
Note: For two or more C category cities in the same region, Net Worth of INR 1 Crore
is required. If the two C category cities are in two different regions, Net Worth of
INR 2 Crore is required.
Source: Ministry of Information & Broadcasting, Government of India
Further, the ministry stated that the Indian shareholder should have 51% equity share in the company excluding the equity share held by scheduled banks and public financial institutions, and the largest shareholder would have the control over the applicant entity. Further, the company's all board of directors, channel head, CEO, and all key executives should be residents of India.
Ministry of Information and Broadcasting has also set a non-refundable application processing fees of INR 25,000.
Interested companies can secure the copy of the notice (N-38014/31/2016-FM) and related documents from http://www.mib.nic.in.
TechSci Research report estimates that the Ministry of Information and Broadcasting would generate at least Rs. 1000 crore after successful completion of Phase III expansion plan.
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The ministry would also be able to generate revenues from the private companies in the form of annual fee charged to the channel company, which is 4% of the Gross Revenue of its FM radio channel for the financial year or 2.5% of Non-Refundable One Time Entry Fees for the concerned city, whichever is higher. However, for the North eastern states, the government of India has fixed the fee of 2% of Gross Revenue annually or 1.25% of Non-Refundable One Time Entry Fees for the concerned city, whichever is higher, for first three years from the date annual license fee is payable.
Further, with the expansion of FM Radio in 69 new cities and 23 existing cities, India FM Radio market is expected to witness an exponential growth in the coming years, with FM Radio companies witnessing increase in their revenues from advertisements by on-boarding new customers as well as by providing wider geographical reach to their existing clientele.
List of Cities, By State and Number of FM Radio Channels for Auction
Number of
Channels for
S. No. City State Auction Category
1 Hyderabad Telangana 1 Category A
2 Asansol West Bengal 2 Category B
3 Vijayawada Andhra Pradesh 2 Category B
4 Akola Maharashtra 1 Category C
5 Alappuzha Kerala 4 Category C
6 Amravati Maharashtra 4 Category C
7 Belgaum Karnataka 4 Category C
8 Bellary Karnataka 4 Category C
9 Bhavnagar Gujarat 4 Category C
10 Dehradun Uttarakhand 4 Category C
11 Devengeri Karnataka 4 Category C
12 Dhule Maharashtra 2 Category C
13 Erode Tamil Nadu 4 Category C
14 Gulbarga Karnataka 3 Category C
15 Hubli-Dharwad Karnataka 4 Category C
16 Jamnagar Gujarat 4 Category C
17 Jhansi Uttar Pradesh 2 Category C
18 Kakinada Andhra Pradesh 4 Category C
19 Kurnool Andhra Pradesh 4 Category C
20 Malegaon Maharashtra 4 Category C
21 Mangaluru Karnataka 1 Category C
22 Muzaffarpur Bihar 1 Category C
23 Muzaffarnagar Uttar Pradesh 4 Category C
24 Mysuru Karnataka 2 Category C
25 Nanded Maharashtra 2 Category C
26 Nellore Andhra Pradesh 4 Category C
27 Puducherry Puducherry(UT) 1 Category C
28 Rajahmundry Andhra Pradesh 3 Category C
29 Saharanpur Uttar Pradesh 4 Category C
30 Salem Tamil Nadu 4 Category C
31 Sangli Maharashtra 1 Category C
32 Shahjahanpur Uttar Pradesh 4 Category C
33 Siliguri West Bengal 1 Category C
34 Tiruchy Tamil Nadu 2 Category C
35 Tirunelveli Tamil Nadu 2 Category C
36 Tirupati Andhra Pradesh 2 Category C
37 Tuticorin Tamil Nadu 2 Category C
38 Ujjain Madhya Pradesh 4 Category C
39 Vellore Tamil Nadu 4 Category C
40 Warangal Telangana 3 Category C
41 Achalpur Maharashtra 3 Category D
42 Agartala Tripura 1 Category D
43 Aizwal Mizoram 1 Category D
44 Barshi Maharashtra 3 Category D
45 Bharuch Gujarat 3 Category D
46 Botad Gujarat 3 Category D
47 Burhanpur Madhya Pradesh 3 Category D
48 Chhattarpur Madhya Pradesh 3 Category D
49 Chhindwara Madhya Pradesh 3 Category D
50 Damoh Madhya Pradesh 3 Category D
51 Dahod Gujarat 3 Category D
Durg
52 Bhillainagar Chhattisgarh 3 Category D
53 Godhra Gujarat 3 Category D
54 Gondiya Maharashtra 3 Category D
55 Guna Madhya Pradesh 3 Category D
Arunachal
56 Itanagar Pradesh 1 Category D
57 Itarsi Madhya Pradesh 3 Category D
58 Jagdalpur Chhatisgarh 3 Category D
Jetpur
59 Navagadh Gujarat 3 Category D
60 Junagadh Gujarat 3 Category D
61 Khandwa Madhya Pradesh 3 Category D
62 Khargone Madhya Pradesh 3 Category D
63 Korba Chhatisgarh 3 Category D
64 Mehsana Gujarat 3 Category D
65 Mandsaur Madhya Pradesh 3 Category D
66 Murwara Madhya Pradesh 3 Category D
67 Neemuch Madhya Pradesh 3 Category D
68 Palanpur Gujarat 3 Category D
69 Patan Gujarat 3 Category D
70 Porbandar Gujarat 3 Category D
71 Raigarh Chhatisgarh 3 Category D
72 Ratlam Madhya Pradesh 3 Category D
73 Rewa Madhya Pradesh 3 Category D
74 Satna Madhya Pradesh 3 Category D
75 Shivpuri Madhya Pradesh 3 Category D
76 Singrauli Madhya Pradesh 3 Category D
Surendranagar
77 Dudhrej Gujarat 3 Category D
78 Veraval Gujarat 3 Category D
79 Vidisha Madhya Pradesh 3 Category D
80 Wardha Maharashtra 3 Category D
81 Yavatmal Maharashtra 3 Category D
Cities in Border
Jammu & Area of J & K and
82 Kargil Kashmir 3 NE states
Cities in Border
Jammu & Area of J & K and
83 Leh Kashmir 3 NE states
Cities in Border
Jammu & Area of J & K and
84 Kathua Kashmir 3 NE states
Cities in Border
Jammu & Area of J & K and
85 Poonch Kashmir 3 NE states
Cities in Border
Jammu & Area of J & K and
86 Bhaderwah Kashmir 3 NE states
Cities in Border
Area of J & K and
87 Dubhri Assam 3 NE states
Cities in Border
Area of J & K and
88 Haflong Assam 3 NE states
Cities in Border
Area of J & K and
89 Jowai Meghalaya 3 NE states
Cities in Border
Area of J & K and
90 Lung-lei Mizoram 3 NE states
Cities in Border
Area of J & K and
91 Mokukchung Nagaland 3 NE states
Cities in Border
Area of J & K and
92 Belonia Tripura 3 NE states
Source: Ministry of Information & Broadcasting, Government of India
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