The Hindu Business Line : Revenue share model for FM radio unlikely

PRIVATE FM radio operators' demand for switching over from existing licence fee regime to a revenue share arrangement may not see the light of the day.

The proposal has not found favour with the Finance Ministry on the grounds that the Government would incur a huge revenue loss.

The Telecom Regulatory Authority of India (TRAI) in its recommendations for the second phase of FM radio privatisation had suggested a flat entry fee and a four per cent revenue share.

However, Government sources said that instead of the Rs 120 crore revenue collection through the licence fee arrangement, just Rs 10 crore would be garnered through proposed revenue share model. The Ministry has also said it would be difficult to audit accounts of FM radio companies.

The Government is planning to maintain the bidding amount for the second phase at realistic levels. "Unlike the first phase where the bidding went to unrealistic levels, the idea this time is to encourage even smaller players to get into the business," Information and Broadcasting (I&B) Ministry sources said.

The highest bid received for any city is likely to be maintained as the benchmark for other operators wishing to commence operations in that city. Like in telecom, the bidders of metros would also have to take up operations in non-metro cities.

The Home Ministry has also ruled out allowing news and current affairs program on private FM channels. "It is very difficult for us to monitor all the private FM channels," source said.