What are the Procedures To Start FM Station & How much does it cost?
To Start FM Station you have to get permission from MIB (Ministry of Information & Broadcasting India). No one is entitled to give this license except the MIB.
To start an Internet Radio Station, there is no license required from the MIB since there is no spectrum or no Frequency is required. The Internet Radios use the user’s internet connection for which the user is already paying. So as of now the MIB has nowhere mentioned any license for Starting an Internet Radio or Online Radio Station.
How much does it cost to start a radio station & whats the investment?
The Ministry of Information & Broadcasting invited sealed Bids forms for expansion to start FM Radios in India through private agencies (Phase – II) as per TENDER No. 212/14/2005 – FM.
Further, to expand more reach of FM Radio broadcasting in the country, the Government has embarked upon Phase III to enable setting up of private FM Radio channels in all cities with a population of more than 1 lakh. The bidding for which was approximately from Rs. 50 Lakhs – upto Rs. 25 Cr depending upon the grades of the cities. Example- Mumbai, Nasik, Agra, etc.
Permission for the channels are granted on the basis of a Non-Refundable One Time Entry Fee (NOTEF). NOTEF is the capital investment for an FM Radio operator. NOTEF also includes annual license fees and operational expenses. In the same manner, Reserved Price (RP) or say bid prices for FM Radio channels in a city, are largely depend upon the revenue generation potential of that particular city/coverage area. The Cabinet approved the RP for other 11 cities as Rs. 5 Lakhs as their population is less than 1 lakh and as these cities have their own strategic importance. For new channels in existing FM Phase-II cities, the highest bid price received for that city in Phase-II.
And for new cities, Reserved Price will be calculated by various methods like Valuation of the FM Station, Valuation by GSDP (Gross State Domestic Product), Valuation based on Listener-ship, and Valuation based on revenue generation potential.
CITIES AND NUMBER OF CHANNELS TO START FM RADIOS, INDIA.
A total of 338 channels in 91 cities across the country are being made available for bidding by Indian private companies at this stage for FM Radio License. The list of cities along with categories and number of channels in each city for bidding is available on this Ministry’s website www.mib.nic.in.
Every applicant shall be allowed to bid for only one FM Radio License per city provided that the total number of Channels allocated to an applicant shall not exceed the overall limit of 15% of the total Channels allocated in India.
ELIGIBILITY FOR APPLICANTS
In the applicant company, total foreign investment, including FDI by Overseas Corporate Bodies/Non – Resident Indians/Persons of Indian Origin etc., portfolio investments by Foreign Institutional Investors (FII), within limits prescribed by RBI shall not exceed 20% of the paid up equity in the entity, subject to the following conditions for FM Radio License in India:
1:- One Indian individual or company owns more than 50% of the paid up equity in the applicant entity excluding the equity held by banks and other lending institutions.
2:- The majority shareholder exercises management control over the applicant entity.
3:-The applicant entity has only resident Indians as directors on the board.
4:- All key executive officers of the applicant entity are resident Indians.
The applicants who want to Start FM Radio Stations will be eligible to participate in bidding for Channels in all the four regions, their financial eligibility shall be assessed on the basis of the following criteria:
Minimum Net Worth required for one Channel per City in each region :
D category Cities:
Rs. 50 Lakh.
C category Cities:
Rs. 1 Crore.
B category Cities:
Rs. 2 Crore.
§ A or A+ category Cities:
Rs. 3 Crore.
§ All Cities in all regions:
Rs. 10 Crore.
The applicant company who wants to Start FM Radio Stations would be required to furnish annual reports and audited final accounts for the last three years, or in the case of a newly incorporated company, balance sheets from the date of incorporation till March 31, 2005.
An applicant company registered after March 31, 2005 shall have to demonstrate its net worth as on 30.9.2005.
Companies not incorporated in India.
Any company controlled by a person convicted of an offence involving moral turpitude or declared as insolvent or applied for being declared insolvent;
A company which is an associate of or controlled by a Trust, Society or Non-Profit Organization;
A company controlled by or associated with a religious body;
A company controlled by or associated with a political body;
Any company which is functioning as an advertising agency or is an associate of an advertising agency or is controlled by an advertising agency or person associated with an advertising agency;
Subsidiary company of any applicant in the same City;
Holding company of any applicant in the same City;
Companies with the Same Management within a City;
More than one Inter-Connected Undertaking at the same City.
A company that has been debarred from taking part in the bidding process by virtue of default in Phase – I or its associate company with the same management.
The defaulters of conditions under Phase-I, who have contested the revocation of their Letters of Intent/License Agreements, thereby continue to be debarred from participating in any future bidding process as per Phase policy.