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In the mid-nineties, when , Mumbai , Kolkata , and Chennai . Indian policy currently lays down that these bids are a One-Time Entry Fee (OTEF), for the entire license period of 10 years. Under the Indian accounting system, this amount is amortised for the 10 year period at 10% per year. Annual license fee for private players is either 4% of revenue share or 10% of Reserve Price, whichever is higher. Earlier, India's attempts to privatise its FM channels ran into rough weather, when private players bid heavily and most could not meet their commitments to pay the governments the amounts they had expected. News in not permitted on private FM, although the federal minister says this may be reconsidered in two to three years. Nationally, many of the current FM players, including the Times Of India , Hindustan Times , Mid-Day , and BBC , are essentially newspaper chains or media, and they are already making a strong pitch for news on FM. India's new private FM channels could also change the advertising scenario. Traditionally, radio accounts for 7% to 8% of ad-spends around the world. In India, it is less than 2% at present. In FM Phase II -- the latest round of the long-delayed opening up of private FM in India -- some 338 frequencies were on offer. Of these, about 250 may be sold -- around 25% of the frequencies are not finding any takers. It has been reported that the government may go for rebidding of unsold frequencies quite soon, within three months (as of early, February 2006) according to one report. Companies like Reliance and South Asia FM (Sun group) are bidding for almost all the cities, although they are allowed only 15% of the total allocated frequencies. In which case, Reliance will have surrender maybe as many as 30 frequencies. |
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