New Delhi, June 30
The Cabinet today approved the proposal to allow 20 per cent foreign direct investment (FDI) in the private FM radio sector and decided on a revenue share regime against the existing licence fee structure to allow a total of 330 stations in 90 cities.
The ban on FDI in news and current affairs in the FM radio sector, however, will continue.
“Time has come for the revival of radio in the country and the government has planned a huge expansion of the private FM radio network which will lead to generation of employment and
opportunities and encourage talent,” Information and Broadcasting Minister S. Jaipal Reddy told newspersons after the Cabinet meeting here.
“Even as we have decided to allow FDI at the existing 20 per cent cap for foreign institutional investors (FIIs), overseas corporate bodies (OCBs) and Non-resident Indians (NRIs), there
will be no news permitted on private FM channels under the present regime,” the minister said.
Mr Reddy said private FM radio operators would now have to part with 4 per cent of their revenue as annual licence fee.
The existing operators would be allowed to migrate to the new regime and there would be no blacklisting of any player.
The minister said the bidding for the second phase would start in about a month’s time, he said, observing that “the government has not looked at the revenue aspect at all” while framing the new policy. “The idea is to encourage expansion of radio in the private sector,” he said.
The minister said the Cabinet had not looked at the aspect of news and current affairs as “several issues have to be looked into before taking a view”.
The second phase of expansion would involve division of cities into four broad categories — A, B, C, D — which would cover metros and other towns. The number of operators in the A category (metros) would be restricted to about 10-11 players while in B cities it would be six, four in C and two in D towns.
“The new players will have to pay a one-time entry fee through close bidding and each successful bidder will pay as per his bid amount,” he said.
“The government will not blacklist any player on the basis of ongoing litigation in various courts... we will allow everyone to participate in the new bidding process,” he added.
He also said the government planned to set up a quasi-judicial body for regulating the private FM radio sector.
To prevent monopoly by a single operator, a company would not be allowed to run two channels in the same city. Moreover, a company could not have radio stations more than 15 per cent of the total national number.
He said most of the recommendations of the Radio Broadcast Policy Committee headed by the Secretary-General of FICCI, had been accepted as well as that of TRAI.
The minister said the new decision would lead to the expansion of the FM radio network and radio programmes with superior quality of fidelity and reception.
