The Indian government finally gave its nod to the proposal for auctioning of phase III of FM channels in the country, according to reports in local media.

It is estimated to bring in revenue of over $89.24 million (Rs 5.5 billion) to the exchequer.

Phase III will see 839 new FM channels launched across 294 cities in addition to the existing 243 private stations in 86 cities from the first two phases of licensing.

The latest phase of FM expansion in the country was originally planned to be rolled out in 2011, but was delayed many times by successive governments.

The government has also approved migration of private FM Radio licences from Phase-II to Phase-III in 69 existing cities for 135 channels, which will expire by March 31.

It also agreed to a migration fee based on Telecom Regulatory Authority of India’s (TRAI) recommendations based on market prices and a partial auction process.

The Ministry of Information and Broadcasting will first auction 135 frequencies in 69 existing cities leftover from the Phase II auctions followed by the remaining frequencies.

The decision was welcomed by industry players as the new frequencies will reach listeners in smaller towns across the country while the first two phases focused on bigger cities.

Radio City CEO Apurva Purohit told PTI:  “We are happy. Despite long delay, it is now happening.“

Tarun Katiyal, CEO Reliance Broadcast Network Limited, which operates 92.7 Big FM, told The Economic Times: “It would not only provide entertainment but also provide employment. It would also help the entrepreneurs and small and big organisation to reach to their customers in hinterland.”

The dates for the auctions are expected to be announced soon.