Telecom Regulatory Authority of India (TRAI) issued its recommendation for the much awaited 'Migration of FM Radio Broadcasters from Phase II to Phase III' on 20 January. In Phase III, an additional 839 channels across 294 cities will be made available for auction.

TRAI has recommended that minimum channel spacing of 400 KHz for FM Radio broadcast issued on 19 April 2012 will come into effect as it would help in increasing the number of FM channels in each city for auction. Secondly, it has recommended the period of permission for the existing operators, who migrate from Phase-II to Phase-III, should be 15 years from the date of migration.

The other point that will be of concern for most players is the cut-off date. As per the recommendation, the cut-off date for the existing FM Radio operators is to be fixed by the Ministry of Information and Broadcasting (MIB), after the completion of auction process for Phase-III of FM Radio. It also stated that the cut-off date for the same should not be later than 31 March 2015. TRAI recommended that an explicit provision needs to be incorporated in the Notice for Inviting Applications (NIA) to permit an existing Phase-II operator to bid for an additional channel (frequency) in existing cities, where it already has an operational FM channel. This is subject to the condition that if it is able to win another channel in the existing city, then it will have to move all existing channel(s) to Phase-III on such terms and conditions as may be prescribed by MIB.

For the migration fee, cities have been categorised into three groups X, Y and Z. TRAI recommends that the migration fee for Group X cities (17 cities where no frequencies are available for auction) should be higher than – Phase-II average bid of the target Group X city multiplied by a factor of 1.5 or Phase-II highest bid of the target Group X city increased by the average increase in auction prices in Group Z cities (vis-?-vis their reserve prices) in the same category in Phase-III.

The fee for Group Y cities (26 cities where 1/3rd or less of the total frequencies are available for auction), should be higher than Phase-II average bid of the target Group Y city multiplied by a factor of 1.5; or Phase-II highest bid of the target Group Y city increased by the average increase in the auction prices in Group Z cities (vis-?-vis their reserve prices) in the same category in Phase-III. But, the lower of the above and Phase-III auction price obtained in the target Group Y city.

The fee for Group Z cities (42 cities where more than 1/3rd of the total frequencies are available for auction) will be the actual auction price obtained in Phase-III.

However, categories A+ and A are deemed to be alike and therefore, considered together.

In all cases, the residual value of the Phase-II permission, calculated on a pro rata basis, should be deducted from the migration fee. TRAI recommends that the methodology for determining the reserve price for fresh cities in Phase-III should be reconsidered as the current methodology might jeopardise the auction.

The cities in Group X are Kolkata, Indore, Baroda, Bhopal, Jabalpur, Coimbatore, Vishakhapatnam, Ranchi, Raipur, Gwalior, Jalandhar, Trivandrum, Kannur, Trichur, Gangtok, Panaji and Shimla.

Cities in Group Y are Mumbai, Delhi, Chennai, Ahmedabad, Surat, Pune, Nagpur, Jaipur, Bangalore, Jamshedpur, Rajkot, Amritsar, Varanasi, Kochi, Madurai, Bhubaneswar, Siliguri, Guwahati, Jodhapur, Patiala, Udaipur, Kota, Puducherry, Mangalore, Hissar and Karnal.

In Group Z, the cities are Lucknow, Kanpur, Hyderabad, Asansol, Patna, Agra, Allahabad, Vijayawada, Rourkela, Muzaffarpur, Kolhapur, Nashik, Aurangabad, Sholapur, Sangli, Ahmednagar, Jalagaon, Dhule, Bilaspur, Akola, Nanded, Chandigarh, Ajmer, Bareilly, Jammu, Srinagar, Bikaner, Aligarh, Gorakhpur, Jhansi, Kozhikode, Tiruchi, Tirupati, Mysore, Tuticorin, Tirunelveli, Gulbarga, Rajahmundry, Warangal, Shillong, Agartala and Itanagar.