Cabinet approves phase 3 FM radio licenses auction plan

The Union cabinet on Thursday approved the proposal of the information and broadcasting ministry to conduct e-auctions for the award of FM radio licences.

The FM radio license auction will mirror the 3G auction process. The e-auction will be conducted in batches and the government will appoint an independent agency for the auction. 
The government expects an income of Rs 1,733 crore from the auction of the new channels. It has also approved raising the foreign direct investment (FDI) in radio to 26% from 20%.
It's a good move, said media analyst Vikash Mantri of ICICI Securities, after being in the pipeline for more than two years. However, he added, "It was not phase 3 that we were waiting for so much aggressively, but for the fact that, whether things can significantly improve on networking and multiple frequencies."
According to Mantri, market leader ENIL is likely to benefit the most from the scale up in operations.
Meanwhile, Asheesh Chatterjee of Reliance Broadcast said the FDI limit should be hiked beyond 26%.
"As and when the money will be required for phase three auction, as the guidelines are sweet enough in areas like multiple frequencies and networking, then there will be a significant chunk available for a strategic partner to come in," he elaborated.