TRAI reiterates delinking FM Phase-III auction from technology

The Telecom Regulatory Authority of India has shared its stance with the Ministry of Information and Broadcasting on the earlier recommendation for ‘Reserve Price for Auction of FM Radio channels’ that the auction of the remaining channels of Phase-III should be done by delinking them from technology.

TRAI said, “A service provider has the commercial interest and will be the best judge to decide on the most suitable technology. Any restrictions on the choice of technology will only impair the development. Broadcasters should be permitted to use any technology (analog or digital or both) for radio broadcasting on the frequency allocated to them through auction in future. In case radio broadcasters opt for digital technology, they should be permitted to broadcast more than one channel subject to technical feasibility on a single frequency allocated to them."

TRAI also shared that as far as the impact of Covid-19 on the radio industry in the bidding during the ensuing Batch III e-auction is concerned, it can only be gauged once the auctions are conducted by the Government.

Ministry of Information and Broadcast has asked for TRAI’s further recommendation on January 13, 2022, on an earlier recommendation “Reserve Price for Auction of FM Radio channels in 283 cities” dated April 10, 2020, and requested TRAI to relook certain points and provide further recommendations under section 11(1) of the TRAI Act, 1997.

This current recommendation by TRAI is a reiteration of its recommendation given on April 10, 2020, because the points raised by MIB in its back reference dated January 13, 2022, do not reflect upon TRAI’s recommendations made in April 2020, causing any material change.

MIB had written to TRAI that in its earlier recommendation too, TRAI had suggested that the auction of the remaining channels of Phase III should be done by delinking them from technology. After conducting field trials/experiments of ITU recommendation digital radio standards in VHF Band II and III, Prasar Bharti has suggested conducting a pilot project consisting of both the digital radio technologies i.e. DRM and HD radio to further evaluate these technologies and also to ascertain their acceptance by broadcasters and listeners including the availability and speed of development of affordable receivers. In view of more experimental studies to be undertaken, TRAI’s ‘delinking them from technology’ point may not be accepted at present. FM Phase III radio policy having been formulated for only analogue radio, the formulation of digital radio broadcasting policy may be addressed separately.

In its letter to TRAI, MIB shared that in order to have a robust formulation on reserve prices for ensuing auctions in 284 cities, the following points may require a re-look:

• Is there a need to check conformity with the current trends in data on GSDP, GR, and FM radio listenership values in view of the altered scenario due to the pandemic?
• Whether RP recommendation by TRAI in 2020, truly reflects the expectations of stakeholders as of date?
• How Covid-19 impact on the radio industry is likely to show in the bidding during the ensuing batch III of FM Phase III E-Auction?
• According to TRAI, what would be the opportune time for conducting the e-auctions?

The Government may decide the time for auction keeping the efficient use of the available spectrum into consideration.

TRAI further observed that the FM Radio sector did see a dip in revenues during the Covid period. In the quarter ending March 2020, the radio industry’s ad revenue was Rs 400.64 crore, which was reduced to Rs 98.41 crore in the quarter ending June 2020. Then it improved to Rs 321.52 crore in March 2021 until the second Covid wave hit the nation. The radio broadcasters' ad revenue dipped again to Rs 148.02 crore. It finally crossed the pre-pandemic level in December 2021 to Rs 421.74 crore.

TRAI further said, “The GSDP per capita has shown positive growth for all States/UTs except Uttarakhand. The Mean rate of growth across twenty-seven States/U.Ts is 33% and the corresponding Median rate of growth is 36.9%.”

TRAI also mentioned that while sending recommendations, FM Radio listenership data was obtained from the Indian Readership Survey 2019. New data is not available as the fresh survey has not been conducted after 2019 due to Covid.

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