Having worked out a three-year staggered auctioning of 806 FM stations between 2011-2013 under phase-three policy of private FM radio, around 160 FM stations across 60 towns will be initially auctioned in the first year beginning January 2011.

The information and broadcasting (I&B) ministry plans to auction these 160 stations in the first round that are located in the metros, mini-metros, state capitals and other large towns which have already been exposed to private FM radio. These include 19 stations across Delhi, Mumbai, Chennai, Hyderabad, Nagpur and Pune among others which are sought by all existing broadcasters after government allowed operators to own more than one station per city in FM-III.

However, along with these metros and mini-metros, the I&B ministry will also bundle a dozen towns lying in the border areas in the first-round of bidding under FM-III as it is keen to set up private FM radio network in the border areas of Jammu & Kashmir and the North East to check cross-border propaganda, sources said.

The policy for FM-III is said to get the Cabinet nod in next two weeks which entails auctioning of a total of 806 FM stations across 283 cities. Under FM-III policy, 217 towns will get access to private FM radio services for the first time. Also, FM-III will allow radio broadcasters to air news and current affairs programmes sourced from the All India Radio. FM-III policy also increases the foreign investment cap for radio from existing 20% to 26% which will help radio firms in attracting overseas investors.

The radio industry in the country has been witnessing double-digit growth since the second phase came into effect in 2006. From the first phase (2001-02) and the second phase (2005-06), there are currently 245 operational private FM stations in the country generating around Rs 900 crore in annual advertising revenue.

Sources said the auctioning for the 160 FM stations may take place in January 2011 and the new FM stations will have to become operational by mid-2011. Next, the government will further auction around 260-300 stations between October-December 2011 which will have to become operational by April-June 2012. Batch of remaining FM stations will be auctioned by mid-2012 which the successful bidders will have to become operational by 2013.