The first phase of FM radio broadcasting (Phase-I) was launched by Ministry of Information and Broadcasting (MIB) in 1999. During Phase-I auction, a total of 108 channels in 40 cities were offered to private agencies in the FM spectrum band (88–108 MHz). A multiple round auction mechanism was followed to award these permissions. The permission for operation of the channel was awarded for a period of 10 years. Out of 108 channels, bid amount was paid only for 37 channels. Of these 37 channels, 21 channels became operational.
The government announced the policy for Phase-II of FM radio broadcasting on July 13, 2005. In Phase-II, a two stage bidding process, i.e., eligibility and financial bidding was followed. A total of 337 channels were put on bid across 91 cities having population equal to or more than 3 lakhs. Of 337 channels, 284 were successfully bid and, after scrutiny, permission was given for 245 channels spanning 87 cities. In Phase-II, 222 channels became operational. All the 21 operational channels of Phase-I also migrated to Phase-II after payment of a migration fee. In total, 243 FM radio channels became operational in 86 cities in Phase-II.
To expand the reach of FM radio broadcasting in the country, the government embarked upon Phase-III to enable setting up of private FM radio channels in all cities with a population of more than 1 lakh. Further, 11 other cities having a population less than one lakh in the border areas of J&K and the north east region are also included in the expansion. Policy guidelines for Phase-III of FM radio broadcasting were issued by the government on July 25, 2011.