<div><em>Bidders are fighting it out for lone slot in Delhi and Bangalore and two slots in Mumbai where bids have passed Rs 100 crore mark, reports <strong>Ashish Sinha</strong></em></div><div> </div><div>Based on the provisional winning bids generated in the ongoing e-auctions of FM stations, just seven stations (out of 135 participating stations) have accounted for around half of the overall provisional winning bids at the end of 19th day of FM radio auctions.</div><div> </div><div>These seven stations are located across Delhi, Mumbai, Chennai, Bangalore, Chandigarh and Jaipur. Together, the provisional winning bids in these seven stations stood at around Rs 505 crore out of a total of Rs 1,128 crore winning price arrived at the end of 19th day of clock-based e-auctions on August 20.</div><div> </div><div>Experts said the trends in e-auctions demonstrate that bigger cities is where most operators are interested to own a FM stations. “The provisional winning price for Delhi is around Rs 170 crore, a whopping six times the reserve price fixed. This is insane. Whoever wins it will find the arithmetic of running the business at such high costs very challenging,” said a senior executive of a radio firm.</div><div> </div><div>While Delhi’s lone vacant station leads the pack, next is Mumbai (Rs 124 crore; two vacant stations), Bangalore (Rs 110 crore; 01 vacant station). Then comes Chennai, Jaipur and Chandigarh.</div><div> </div><div>The e-auctions is still continuing and will continue till the bids are received for any of the 135 channels.</div><div> </div><div>According to the ministry of information and broadcasting, at the close of the 19th day of bidding, 94channels in 56 cities became provisional winning channels with cumulative provisional winning price of about Rs 1,128 crore.</div><div> </div><div>As earlier reported by BW Businessworld, at the end of 40 rounds (end of 10th day of e-auctions), over four dozen stations in 28 cities were sitting on their reserve price. </div><div> </div><div>Experts pointed to the high reserve prices as one of the main reasons for a lack of interest from the bidders. Then the FM-III policy itself had put a cap on any single FM operator owning more than 15 per cent of the total channels available.</div><div> </div><div>“Take for example the reserve price of channel in Kozhikode at Rs 7.02 crore. Money can’t be made by anyone even if this is the winning bid. Similar is the plight in Tirupati where the reserve price in Rs 4.5 crore. If only about half the channels are won by operators at the end of this first round of auctions, then the government should review its FM-III policy. No one is here to do charity,” said a technical expert on FM radio stations who advices leading players.</div><div> </div><div>ashish.sinha@businessworld.in</div><div> </div>
BW Reporters
Ashish Sinha is an experienced business journalist who has covered FMCG, auto, infrastructure, tourism, telecom among several other beats. Ashish has keen interest in the regulatory scenario impacting different sectors. He writes on aviation, railways, post and telegraph, infrastructure, defence, media & entertainment, among a wide variety of other subjects.
