Prominent bidders include Reliance group, RPG group and leading media houses including Indian Express group, Bennett Coleman & Co Ltd, Zee Telefilms, Living Media group, Modi Entertainment, Sony TV, Sun TV, Eenadu TV, Udai TV, NDTV and United TV, according to information and broadcasting ministry sources.

The bids will be opened on November 19.Ministry sources said four companies - Zee Telefilms, Bennet Coleman & Co Ltd, New Media group and Vertex Broadcasting - have bid for all the 40 cities.

The I&B ministry sold 451 application forms. Ministry sources said that if the government is not in a position to start its own education radio station, it may offer it to the private sector through a bidding process. The government had earlier set apart one station in each centre to be used for education. The I&B ministry expects that a total of 76 frequencies can be madeavailable under a two-part national plan.

All India Radio plans to sell a band from 104.4mHz to 108mHz to private parties against licence fees of Rs 1.25 crore, Rs 1 crore, Rs 75 lakh, Rs 50 lakh and Rs 20 lakh for the A, B, C and D categories, respectively. The fees will be increased 15 per cent annually for the next 10 years.

The private sector would be making an entry into the FM radio broadcasting after a gap of close to two years. On June 26 last year, a Delhi high court directive had sent almost all private broadcasters off the air.

The private sector made a foray into FM broadcasting following the opening up of the FM slots in the early 90s.

Ministry sources expect private FM stations to take off only towards the end of next year or early 2001. "It will take least one year for the private players to kick off operations, after issue of licences," officials said.

Ministry officials said that the private sector can avail of the services of AIR's engineering expertise in setting up FM radiostations. Media analysts expect foreign broadcast engineering companies to enter the field in the coming months.