Govt allows FDI in private FM radio; says no to news
Friday July 1 2005 00:00 IST
NEW DELHI: Launching a major expansion programme for private FM radio
services, the government allowed 20 per cent foreign direct investment
the sector on Thursday and decided on a revenue share regime against
existing licence fee structure to allow a total of 330 stations in 90
The Union Cabinet, which met here to thrash out the policy framework
second phase of FM radio licensing, however, decided to continue the
news and current affairs.
"Time has come for revival of radio in the country and the government
planned a huge expansion of the private FM radio network which will
generation of employment and opportunities and encourage talent,"
Information and Broadcasting Minister S Jaipal Reddy told reporters
"Even as we have decided to allow FDI at the existing 20 per cent cap
FIIS, OCBs and NRIs, there will be no news permitted on private FM
under the present regime," the Minister said.
The licence fee regime adopted in the first phase proved to be
for the growth of FM radio sector where of the 108 frequencies put on
only 21 were operational, two of which have also given notice to close
Reddy said the operators will now have to shell four per cent of their
revenue as annual licence fee, adding that existing operators will also
allowed to migrate to the new regime and there "would be no
of any player.
Bidding for the second phase will start in about a month's time, he
observing that "the government has not looked at the revenue aspect at
while framing the new policy. "The idea is to encourage expansion of
in the private sector," he said.
Asked about broadcast of news and current affairs, he said, "We have
looked at this aspect at all... I am not saying no... Actually I have
taken a decision on this aspect as several issues have to be looked
before taking a view."
Reddy said in framing the new policy, the government had accepted most
the recommendations of the radio broadcast policy committee under the
chairmanship of FICCI's Amit Mitra as well as that of broadcast
He said in the second phase, the cities would be divided into four
categories -- A, B, C and D -- starting from the metros and flowing
the smaller ones.
The number of operators in the a category (metros) will be restricted
about 10-11 players while in B cities it will be six, four in C and two
"The new players will have to pay a one-time entry fee through close
process, and each successful bidder will pay as per his bid amount,"
said, explaining the manner in which the second phase licences will be
Existing operators will have to pay the average bid amount of new
"The government will not black-list any player on the basis of ongoing
litigation in various courts... We will allow everyone to participate
new bidding process," he added.
Observing that competition will be a key element under the new regime,
said "no private radio can only run on film music. They have to
their own content to survive."
Reddy said the government plans to set up a quasi-judicial regulatory
authority to deal with disputes, pending which the ministry will have