Closure of FM III will place India in the very exclusive club of countries that have over 1,000 FM stations, just a tad behind the world's largest FM radio market, US, which has 1,424 private FM stations.
The third phase is expected to generate over Rs 3,000 crore as one time entry fee to the government, an industry source said. The I&B ministry is likely to follow the same bidding process for FM III as it did for FM I and FM II, sources told FE. The government collected Rs 1,134 crore from 337 frequencies in FM II, of which letters of intent have been issued for 262 stations. With third phase being planned, a number of existing radio companies will benefit as it will reduce the average bidding price for smaller cities. FM-III will also help in reducing the cost of constructing the common infrastructure in various cities as more players will get the licence for operation, sources pointed out.
But the question before the industry is: How many FM stations can be accommodated in a single city According to the Wireless Planning & Coordination Cell in department of telecommunications (DoT), 88-100 MHz and 103.8 to 108 MHz are specifically identified for private FM radio broadcast services in India. For technical reasons, there has to be a separation of 800 KHz between two FM frequencies. In theory, between 88-100 MHz and 103.8 to 108 MHz, more than 25 FM stations can work in a single city, a source from FM industry explained.
Under FM-I and II, not more than 4-6 stations were allocated in a single city. The third-phase is expected to involve the 90 cities, which were covered in FM-II as well and add another 55-65 new cities, the sources added.