The Hindu Business Line : 29 cos participate in FM radio bidding

THE Government has kicked off the second phase of FM radio privatisation with over 29 companies participating in the financial bidding process for 64 frequencies in 13 metros and key cities. Initial estimates suggest that the Government is likely to mop over Rs 500 crore as one time entry fee (OTEF) from successful bidders.

Just as in the first round, Mumbai attracted the highest bid with HT Music offering to pay Rs 35 crore for a frequency in that city followed by Adlabs Films with a bid of Rs 28.10 crore. Radio Mid-day West bid the highest of Rs 31.40 crore for a licence in Delhi, with Adlabs and HT Music emerging as the next highest bidders offering about Rs 28 crore each.

Companies were also willing to pay higher for frequencies in Bangalore and Hyderabad compared to Chennai and Kolkata. Entertainment Network India Ltd (ENIL) pays Rs 21.6 crore and Rs 18 crore for a channel in each of the two IT centres of the country. Meanwhile, the highest bid of Rs 6.11 crore for Kolkata was made by Adlabs, while Radio Mid-day West emerged on the top in Chennai with its Rs 12.20 crore offer. Similarly, bids were invited for Jaipur, Lucknow, Pune, Nagpur, Surat, Kanpur and Ahmedabad.

According to available information, ENIL that now operates in six cities has bagged all the seven centres it had bid for, Music Broadcast Private Ltd got seven out of the nine centres it had bid, Adlabs is expected to be present in about six centres, while HT Music will be present in four key metros. Living Media Group, which had recently sold its three licenses, has again successfully bid for Delhi, Kolkata, and Mumbai.

According to Mr A.P. Parigi, Managing Director and CEO, ENIL, "The second phase of FM radio privatisation will lead to an entertainment revolution. The bidding process has been rational compared to the earlier license fee regime." He said that the company had expected a larger financial outgo for migrating from the old license fee regime to a revenue share structure for its incumbent six licenses.

However, Mr Rajesh Sawhney, President, Reliance Entertainment added, "Each player has read the market and has bid according to his business plan. Therefore, there is a variation in the amounts."

For each city, the Information and Broadcasting Ministry had decided to fix the reserve price at 25 per cent of the highest bidder. Companies that quoted lower than this amount were disqualified.