FM broadcasting in India

In the mid-nineties, when India first experimented with private FM broadcasts, the small tourist destination of Goa was the fifth place in this country of one billion where private players got FM slots. The other four centres were the big metro cities: Delhi, Mumbai, Kolkata and Chennai. These were followed by stations in [Bangalore,Karnataka|Bangalore] , [Hyderabad, Andhra Pradesh|Hyderabad] , Jaipur and Lucknow.

Indian policy currently states that these broadcasters are assessed a One-Time Entry Fee (OTEF), for the entire license period of 10 years. Under the Indian accounting system, this amount is amortised over the 10 year period at 10% per annum. Annual license fee for private players is either 4% of revenue share or 10% of Reserve Price, whichever is higher.

Earlier, India's attempts to privatise its FM channels ran into rough weather when private players bid heavily and most could not meet their commitments to pay the government the amounts they owed.

Content

News in not permitted on private FM, although the federal minister says this may be reconsidered in two to three years. Nationally, many of the current FM players, including the Times of India, Hindustan Times, Mid-Day, and BBC are essentially newspaper chains or media, and they are already making a strong pitch for news on FM.

Market view

India's new private FM channels could also change the advertising scenario. Traditionally, radio accounts for 7% to 8% of advertiser expenditures around the world. In India, it is less than 2% at present.Fact|date=March 2007

Current allocation process

In FM Phase II — the latest round of the long-delayed opening up of private FM in India — some 338 frequencies were offered of which about 237 were sold.Fact|date=March 2007 The government may go for rebidding of unsold frequencies quite soon. In Phase III of FM licensing, smaller towns and cities will be opened up for FM radio.

Reliance and South Asia FM (Sun group) bid for most of the 91 cities, although they were allowed only 15% of the total allocated frequencies. Between them, they have had to surrender over 40 licenses.Fact|date=March 2007