MUMBAI: A letter has been sent by the government to radio operators stating that inter ministerial committee has accepted the TRAI (Telecom Regulatory Authority of India) formula. According to sources, the TRAI formula on migration has been accepted, and as per the formula the migration fee will be determined after the auctions.

Phase III pre-qualification advertisement will happen in August. The letter was sent to operators a few days ago.

During a meeting chaired by Information and Broadcasting (I&B) Secretary Bimal Jhulka on 31 July, radio operators were given an indication that the TRAI formula for Phase II renewal policy will be accepted.

In TRAI’s report to the I&B ministry, it recommended that the period of permission for the existing operators, who migrate to Phase III, should be 15 years from the date of migration. It also stated that the existing FM radio operators for migration to Phase III should be fixed by I&B after the completion of auction process, the authority recommended that it should not be later than 31 March 2015.

The authority also 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, subject to the condition that if it is able to win another channel in the existing city.

The authority recommends is that the migration fee should be:

(a) Group X cities (17 cities where no frequencies are available for auction, refer Annexure-IV):

Higher of –

• 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.

(b) Group Y cities (26 cities where 1/3rd or less of the total frequencies are available for auction, refer Annexure-IV):Higher of-

• 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 auction prices in Group Z cities (vis-a-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.

(c) Group Z cities (42 cities where more than 1/3rd of the total frequencies are available for auction, refer Annexure-IV):
• The actual auction price obtained in Phase-III.

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.

The authority stated 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.