The Hindu Business Line : FM cos told to pay up licence fees

THE Information and Broadcasting (I&B) Ministry appears to have declined all requests to defer payment of licence fees even as it is working overtime to complete the reform process in the FM radio business before the forthcoming general elections.

Industry sources said that FM radio companies have been asked to pay up the second and third year licence fees as and when it is due. "Though the FM companies had sought a deferment in payment of dues till the reforms are announced, the Ministry has suggested that any adjustments could be done later," said industry sources.

The industry has been pitching for a migration from the existing licence fee regime to a revenue-sharing system. When the FM radio licences were auctioned, companies have paid Rs 9.75 crore as licence fee for Mumbai, Rs 7.12 crore (Delhi), Rs 1 crore (Kolkata) and about Rs 3.3 crore for Chennai and these go up by 15 per cent each year. The total licence fee paid to the Government, so far, is over Rs 75 crore, while the FM players have incurred losses to the tune of over Rs 120 crore on total revenues of just Rs 47 crore.

Meanwhile, the I&B Ministry is planning to complete the FM radio reform process before the general elections. A task force headed by Dr Amit Mitra, Secretary General, Federation of Indian Chambers of Commerce and Industry, had submitted a report in November last year. Some of the key policy changes suggested permitting licence holders to shift from a licence fee to revenue-sharing arrangement, allowing 26 per cent foreign direct investment in the radio business and permitting private players to broadcast news.