India Phase III: ENIL MD disappointed with TRAI’s recommendations

Saturday 28 March, 2015

The Managing Director of Entertainment Network India Limited (ENIL), the group behind India’s Radio Mirchi 98.3 FM, has said that the reserve price (RP) for Phase III auctions FM channels in the new cities is too high.

Speaking to Moneycontrol.com, Prashant Panday said that the industry is very disappointed with the recommendations made by media regulator Telecom Regulatory Authority of India (TRAI) on Tuesday.

According to him, most of the TRAI’s recommendations regarding new RP for 253 new cities as well as 11 other cities in border areas are not viable and are much higher than earlier.

He also said that none of the points raised by the industry in the consultation paper were accepted by TRAI.

According to him, TRAI initially observed that the reserve fees were too high and may jeopardise the auction but after six months they have made recommendations which increase the reserve fees even higher than what they were earlier.

The reserve price for Phase III FM radio valuations would be based on population of the city and on per capita gross state domestic product.

Taking into account listenership by existing radio operators and on per capita gross revenue earning by existing operators, the RP in new cities will be set at 0.8 times valuation of FM channels in the city.

The first batch of auctions to be in first half of FY16 and Panday thinks the industry is likely to bid only for 200-300 out of the 800 or so frequencies.

ENIL, which operates Radio Mirchi in 32 stations across 14 states in the country, is likely to spend around $80 million to $128 million (Rs 5 billion to Rs 8 billion) to participate in the phase III auctions for both existing and new cities.

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