Tune in for bouquets, FM radio may do a TV

Written by Soma Das | New Delhi, Feb 25 | Updated: Feb 26 2008, 05:36am hrs
The Telecom Regulatory Authority of Indias (Trai) recommendation to allow one entity to own multiple channels in the same district may usher in a culture of bouquet on FM radioquite like the offerings on television space where the likes of Star, NDTV, Sahara groups own channels in varied genres such as general entertainment, news and sports. Currently, one player is allowed to own only one channel in a particular city.

Largely, the recommendations are progressive and meet most of the industry concerns. Holding multiple channels in the district would mean diversification of the content. We could offer, say, English, Punjabi or Tamil channel in Delhi depending on listeners demands, said Prashant Pandey, CEO, Radio Mirchi. FM broadcasters have been accused of offering similar content.

Endorsing the recommendation to remove the clause which doesnt allow a player to own over 15% of total channels in the country, Ismail Dabhoya, vice-president (finance-commercial) of BIG 92.7 FM said, With the Competition Act, the scope of monopoly gets diluted. Also, the provisions are not the same for any other industry in media space. Multiple channels will allow for clearer differentiation and ensure better entertainment to listners.

Trai has also recommended that the reserve one-time entry fee (OTEF) be fixed at 50% (currently 25%) of the highest bid price in a district. This move if accepted by government will make the entry fee more expensive for all bidders except the highest bidder. For instance, if the highest bid was Rs 100 for a city, all bids of Rs 25 and above used to qualify for licence allocation.

But according to Trais latest recommendation, the entities bidding below Rs 50 will be disqualified. Pandey predicts that this move could result in unused frequencies as witnessed during the second phase of license allocation, when OTEF was 25 % of the highest bid, many players were disqualified and frequencies remained unutilised. For instance, in Hyderabad, where seven licences were to be allocated, only four could be allocated as rest of the players were disqualified for bidding lower than 25 % of the highest bid. The highest bidder in Hyderabad had bid at Rs 18 crore while the fourth player (who was allocated the license) had bid at Rs 6.11 crore. Similarly in Patna there is only one player as none of the bids could fulfill the above criterion. The industry fears that once the proposed OTEF is implemented, it will result in many more bidders getting disqualified and many more frequencies remaining unutilised.

From the perspective of the government, Trais recommendation can be seen as move to rationalise the entry cost by reducing the difference between the highest and lowest bidder for the same service.