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New Satellite Radio Policy Doubles Entry Fee; Commercials Barred; Online Radio?

The information and broadcasting ministry has finally framed a draft of the much-delayed new satellite radio policy. It incorporates  TRAI’s recommendations given in June 2008 and comprehensively covers topics such as eligibility criteria for applications, period of license, entry fee, annual license fee, bank guarantee, basic conditions & obligations, technical standards, monitoring, inspection, value added services, terrestrial repeaters, termination of license, Wireless Planning and Co-ordination department’s license, as well as disputes and jurisdiction.

The new satellite policy has been in limbo for a year now and does not appear to be introducing any significant changes. There are just a handful of satellite radio providers – Worldspace, Sirius, XM, Muzak, etc. The policy should have attempted to encourage more ventures as well as attract the existing global ones, but instead it has doubled the entry fees and introduced more red tapism. Also read about possible entry strategies for satellite radio companies (not updated) here.

We’ve been trying to locate a copy of the guidelines on the Ministry of Information & Broadcastings website, but to no avail. HindustanTimes, which has a copy, reports on guidelines that are similar to those proposed by the TRAI.

We’ll update when we have more. The TRAI guidelines were as follows:

Licenses, Fees & The Roll Out Obligation

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For the first time, a license for registration of radio channels offered by the satellite radio provider will be introduced. Applicants will receive two licenses: one for entry and setting up the network; and another for registering the radio channels to be broadcast. This second one has been introduced to keep track of the channels to ensure compliance with the guidelines.

The one time entry fee has been doubled to Rs 5 crores, and the ten year operation license can be extended for another decade. The annual license fee would be 4% of the gross revenue. A roll out obligation has been mandated, requiring the provider to roll out the service within a year.

TRAI recommended that if the number of eligible applicants exceeds the number of licenses being offered, auctioning should be taken up, just as it is for 3G spectrum.

FDI limit is at 74% for satellite radio providers, just as it is for DTH operators. If opened up to 100%, it would be easier for the global satellite providers to set up operations.

Commercial Ads Banned

Worldspace suggested that advertisements be allowed on satellite radio channels to improve revenues, but TRAI has refused in public interest, noting that there was “intensified demand” from consumers of other platforms such as television and FM radio channels that the duration of advertisements should be curtailed. Since the channels will be registered with the ministry, it can be ensured that no commercial ads are played. Only two minutes per hour of promotional advertising about the satellite radio service and the channel(s) carried by it is allowed. Worldspace has had a rough time getting back on its feet – it went bankrupt last October when sales in India did not pick up and costs soared.

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Satellite radios will only be able to transmit All India Radio (AIR) news broadcasts and Prasar Bharti (DD). They can not undertake news reporting nor can they broadcast content from private news media.

Online Radio

The satellite policy will also offer details on if satellite radio providers can transmit music programs on their websites. Worldspace’s attempt to offer online radio services has been halted due to the satellite policy, and if the TRAI recommendations are adopted, Worldspace will be able to offer radio services on the Internet in India, and maybe the mobile web too. More on it here.

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