‘Should TV channels be auctioned?’

NEWDELHI: The Centre is exploring the possibility of auctioning satellite television channels, as it does with FM stations, and has written to the telecom regulatory authority of India (Trai) for its feedback.

The information and broadcasting ministry believes granting licenses for entertainment and news channels after auction will bring in more money to the exchequer while a single-window clearance system will cut down on time taken to grant licenses.

At present, interested parties apply to the I&B ministry for permission to start a channel, which is followed up with seeking clearances from the ministries of home affairs, science & technology, finance (in case of downlinking from abroad) and electronics & information technology.

License holders have to pay ₹10,000 as uplinking and downlinking fee and ₹2 lakh as yearly fee while renewing contracts.

To start a new entertainment or non-news channel, the net worth of a company has to be ₹5 crore, and four times that amount to launch a news channel.

“Feedback from the stakeholders is that starting a satellite TV channel is time consuming, even though it is not capital intensive. On the other hand, since the companies wishing to start channels need to show only a turnover of a few crores, there are many with vested interests who apply. So, it has been suggested that the auction system should be followed to ensure only those who mean business apply,” said a source.

The Trai, too, had on its part floated a consultation paper on ease of doing business in broadcasting sector earlier this year. It has advocated removing proce- dural bottlenecks and policy issues by introducing investorfriendly policies and cutting down on paperwork.

The move will worsen the economics for existing channels, said Jehil Thakkar, partner at management consulting firm Deloitte India. “News as genre is not significant on TV as compared to entertainment channels. Finding differentiation and creating new brands will be difficult. Besides, all news broadcasters have cut their budgets especially on news gathering costs. So, the economics will definitely be a challenge,” said Thakkar.