FM players concerned over speedy implementation of TRAI's recommendations

Players feel that TRAI has done its job and now it is up to MIB to move on the issue and not delay implementation which would result in loss to the exchequer

BestMediaInfo Bureau | Delhi | February 24, 2014

The Telecom Regulatory Authority of India (TRAI) issued its recommendations on “Migration of FM Radio Broadcasters from Phase II to Phase III” last week which will enable the auction of an additional 839 channels across 294 cities. In its recommendation, TRAI has laid out the process, fee structure and timeline for the auctions. BestMediaInfo.com spoke to some FM players to demystify the primary points of the recommendations including migration and reserve price for Phase II to Phase III.

Vineet Singh Hukmani

Reacting on migration, Vineet Singh Hukmani, MD & CEO, Radio One, said, “TRAI's recommendation on migration formula is fair to both the players as well as the government and insulates both current and future players from overbidding. Its assessment of reserve price is more practical and more or less takes into account the nascent stage of the industry and a difficult economic environment. Its formula based on categorisation of cities based on available licenses for bidding versus just looking at cities from a geographical/GDP standpoint is a very innovative approach. It has put a deadline for auctions and therefore migrations to be completed by March 2015 so that the licenses that are set to expire can easily migrate before the deadline.”

Nisha Narayanan

Nisha Narayanan, COO, Red FM, said, “We welcome the recommendations. We are pleased that the cut of date for migration has been put as March 31, 2015 meaning that the auctions have to happen before that date so that the migration formula can be applied.”

“We are happy that the TRAI has recommended a 15-year licence period and considered the migration fees based on the availability of channels in a particular city. This will help in rationalizing bidding in case of a scarcity situation and we warmly welcome the same,” added Narayanan.

Hurdles: Although TRAI's recommendations look promising, the process may find a few hurdles in its way forward. Time is of the essence as it's an election year and the FM players have only one more year before their licences expire. In this short frame of time, the Ministry of Information & Broadcasting (MIB) has to take into account TRAI's recommendations and announce its decision on the issue. Post this it needs to conduct auctions and migration all within the deadline of March 2015.

The real risk is a delay on MIB's part and they need to be prepared for migrating players within the guidelines of the TRAI formula even if auctions don't happen. The current players have built the FM radio industry and delays must not put them in a disadvantageous position. So the ball is firmly in MIB's court. The GOPA Deadline on the MIB site keeps getting pushed and the players look forward to progress on the phase 3 front now that TRAI has done its homework.

Another important issue is that TRAI has 'reiterated' its earlier stand in 2012 supporting 'reduction of channel spacing' to bring in more stations. MIB had already rejected that recommendation as it was not practical to implement it due to cost, time and resource issues. Also, most of the players had rejected it on grounds of business viability and MIB will not approve of this recommendation.

Hukmani commented, “MIB had commissioned TRAI to find a suitable migration and reserve price formula. It has done its job which the players support. Now it is up to MIB to move on the issue and not delay which results in loss to the exchequer.”

Narayanan too expressed concern on the speedy implementation of TRAI's recommendations. "The migration issue has been a contentious one and an issue that was causing many a sleepless night to many an operator. We are all looking forward to Phase 3 and the faster it gets implemented, the better it will be for the industry, and the MIB should move forward on all matters."

Info@BestMediaInfo.com

Info@BestMediaInfo.com