Broadcasting sector regulator Trai has initiated consultations to work out a methodology for establishing the ‘Reserve Price’ for auction of Phase-III FM radio channels in new cities.
In a consultation paper released, Trai suggested that the reserve price for FM radio channels in a new city can be set at 0.8-times the valuation of FM radio channels in that city.
It also suggested methodologies under which the valuations for FM channels could be estimated on the basis of listenership, Gross District Domestic Product (GDDP) and also as per the revenue generation potential.
Trai has sought comments from stakeholders about its approach towards establishing the reserve price in the 253 new cities. It also invited views about the proposal that the Reserve Price for FM radio channels in a new city can be set equal to 0.8 times of the valuation of FM radio channels in that city.
The regulator also proposed a reserve price of Rs. 5 lakh per city for FM radio channels in 11 border cities in Phase- III and sought comments on the same.
The Information and Broadcasting Ministry had earlier sought Trai’s recommendations on Reserve Prices for FM radio channels in new cities following which it issued the consultation paper to solicit comments and views on the reserve prices for auction of FM radio channels in the altogether 264 new cities in Phase-III.
In its consultation paper, Trai also said that the objective for expanding FM radio broadcast service is to make available a variety of entertainment, information and educational content to citizens.
This goal is sought to be achieved by covering under- served geographical areas of the country by setting up FM radio stations in new cities, it added.
“The primary purpose of auctioning FM radio channels is to boost the FM radio movement and expand its outreach. The expectation is that FM radio will contribute towards development of society, fulfil the entertainment and information needs of citizens, and promote socio-economic activity.
“The revenue generated from the auction process is incidental to the realisation of these larger societal objectives,” Trai said in its consultation paper.