Nivedita MookerjiFriday, November 11, 2005 22:51 ISTNEW DELHI:
Over 100 applications have been made to the government, seekingentry to the second phase of private FM radio service.Among those who have submitted their pre-qualification bids, include MusicBroadcast Private Ltd (MBPL), Bennett Coleman, Hindustan Times, Bhaskargroup, Jagran group and Reliance, among others. The deadline for submittingpre-qualification bids was Friday.While only 42 applications had come in till Thursday, the rest weresubmitted on Friday. The government has thrown open the second phase of FMradio for 338 frequencies (radio stations) across 91 cities.Technical evaluation of these bids, including security clearances from thehome ministry, will take around two months, it is learnt.Financial bids have to be submitted in January. While the last date forfinancial bids for the 'A plus' and 'A' category cities (big cities acrossthe country) is January 6, for cities and towns in the north, the deadlineis January 13. For eastern Indian cities and towns, the deadline is January20, for western cities, it is January 27, and for the south, it is February3.Every applicant and related entities must bid for only one channel per city,as per the tender document.Also, channels allocated to an applicant and related entities should notexceed 15% of the total number of channels in India. Subsidiaries ofapplicants in the same city will be disqualified, and so will be the holdingcompany of the applicant company in the same city.Foreign investment will be restricted to 20% of the paid-up equity of thecompany. Also, one Indian entity must hold more than 50%, excluding theequity held by scheduled banks and other public financial institutions. Alldirectors on board must be Indians, as per the tender. Even all the keyexecutive officers of the applicant entity must be resident Indians.Financial bids will have a one-time entry fee, deposit of an amountequivalent of 50% of financial bid, and performance bank guarantee in favourof the I&B ministry equivalent to 50% of financial bid. To apply for allcategories of cities, a company must have a net worth of Rs 10 crore, for Aplus and A class cities Rs 3 crore, for B category, Rs 2 crore; for C class,Rs 1 crore; and for D class, Rs 50 lakh.Making a shift from a licence era to revenue-sharing, the government hasspecified the annual revenue share at 4% or 10% of the reserveone-time-entry-fee (OTEF) for a city, whichever is higher. Annual fee willbe paid on quarterly basis.While FM bidders must operationalise within 18 months of issue of LoI, theymay need to opt out in case of delay. But, the tender has stated, "in theevent of default in operationalisation of a channel being attribuateble todelay beyond reasonable period by Becil/Prasar Bharati, WPC, the prescribedtime limit will be extended." Co-location on Prasar Bharati towers ismandatory for FM companies, and Becil, a PSU under the I&B ministry, willintegrate the infrastructure for radio operations.As for content, news and current affairs will not be allowed, and 50% ofprogramming on a channel must be produced in India, according to the FMtender.The first phase of FM radio privatisation took off five years ago.
http://dnaindia.com/report.asp?NewsID=9431&CatID=4
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