Panel Pegs Revenue Share From FM Players At 4%

New Delhi: | Updated: Nov 4 2003, 05:30am hrs
Revenue-sharing between private FM radio players and the government has been finalised at 4 per cent, according to sources. Although a lower revenue-sharing rate was proposed by some members of the expert committee on radio, it has been fixed at 4 per cent. Revenue-sharing will follow payment of a one-time entry fee through bidding.

The committee, headed by Ficci secretary general Amit Mitra, has submitted an advance copy of the draft report to the information and broadcasting ministry. The formal report would be submitted by November 7. The committee has missed two deadlines for submitting the report. After the government receives the formal recommendations, it would be put up on the Web for public comments.

Incidentally, existing FM licencees, who had bid sky-high for licences during the first phase of privatisation, found the going tough once they set up operations. That was when FM radio companies, including Bennett Coleman, Living Media and Mid-Day, began lobbying with the government, stating that the high licence fee regime was killing their business. The government then decided to form this committee to overhaul the rulebook for FM radio.

Even as the draft guidelines for the second phase of FM privatisation have been circulated to the expert committee members for their approval, theres demand for another round of discussion on certain issues, it is understood.

For the current players, migration from the licence era to the revenue-sharing regime is of utmost significance. Law firm Amarchand Mangaldas, which is Ficcis knowledge partner, has given significant inputs for the migration package, keeping in mind the legal perspectives.

Besides revenue-sharing at 4 per cent, the committee is recommending foreign direct investment (FDI) on par with television news at 26 per cent. Currently, up to 20 per cent of foreign institutional investment (FII) is permitted in FM ventures. FDI is not allowed in FM radio at all.

Another area where the committee has recommended a change is content of the radio programmes. While private FM radio stations are allowed to broadcast non-news, non-current affairs programmes, it has suggested inclusion of news.