Union Cabinet gives nod to FM Phase 3 auction

Union Cabinet has given its nod for conducting FM Phase-III auction and renewal of Private FM Radio licenses from Phase-II to Phase-III in 69 existing cities for 135 channels.

It  was decided in Cabinet meeting chaired by Prime Minister Narendra Modi.

Key facts of FM Phase-III auction

  • The Phase III will e-auction around 839 FM channels in 294 cities. It is expected to commence before the end of the present fiscal year. However, it will continue over the next three years.
  • It will be done according to recommendations of the Telecom Regulatory Authority of India (TRAI) on payment of migration fee.
  • Union Government already had appointed an e-auctioneer to monitor the e-auction.
  • Successful auctions of all proposed channels in Phase-III seeks to add an estimated revenue of over 550 crore to the National Exchequer.

Background

  • Earlier, the decision relating to Phase-III was taken by then Union Cabinet of UPA Government on 7 July 2011.
  • But it was delayed as channel auction was proposed on e-auction basis.
  • In March 2014, the Empowered Committee had decided to charge a fee for migration to existing operators who wanted to move to Phase-III.

In India, as of now two phases of Private FM Radio have been implemented. They are Phase-I (1999-2000) and Phase-II (2005-06). While, there are 243 private FM channels operating in 86 cities of the country, spanning 26 States and three Union Territories.

Thus, cabinet’s decision for auction is critical for the private radio industry since some of the licenses of the channels are expiring on 31 March, 2015.

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