Tuning In: Private Radio Broadcasting (an overview)

Radio broadcasting, once written off as a mode of entertainment, is again finding favor.

As per various studies, the Rs. 1000 crore Radio broadcasting industry of India is in for some serious business. Most players are looking forward to an improved business scenario post the expected changes from the Phase III policy.

The Government of India opened Radio broadcasting for private players sometime in 1999-2000 through the Phase I auction. At that time, the Ministry of Information & Broadcasting (MIB) offered 108 radio frequencies (channels) across 40 cities. It received 101 bids, aggregating to a license fee of Rs.425 crore. However, with most bidders defaulting MIB received just Rs. 160 crore for 37 channels. The sadder part is that a mere 22 channels were actually operationalized.

Discussions between the industry and government helped improve the situation through the Phase II auction held in 2006. In the Phase II policy, 337 radio frequencies across 91 cities were offered to the private sector. The MIB awarded 280 frequencies for Rs. 1150 crore, including OTMF by existing players. The new players paid OTEF or One Time Entry Fee, while the existing players paid OTMF or One Time Migration Fee.

Putting it frankly, the ‘revenue-sharing model’ under Phase II Policy came as a savior and helped infused life in the FM radio industry.

Phase I: Private FM allowed, Fixed License Fee, 15% escalation, 10 year validity, No FDI/FII, Open bidding
Phase II: Revenue sharing model, OTEF/OTMF, FDI/FII limit at 20%, 10 year validity, 15% max frequencies per operator, Closed bidding
Phase III: To be announced

Radio Mirchi owned by ENIL – a times group company – claims to be the largest private radio broadcaster in India. It earns over Rs 225 crores in revenues per year.

Radio Mirchi; 98.3; 32 stations; Times Group
BIG FM; 92.7; 45 stations; ADAG Group
Red FM; 93.5; 43 stations; Sun TV
Radio City; 91.1; 20 stations; MBPL
MY FM; 94.3; 17 stations; Dainik Bhaskar
FEVER; 104.0; 4 stations; HT Media
Radio One; 95.0; 7 stations; Mid-Day

Notes:
1) A Radio Broadcaster normally broks a day in 5-7 slots: like Breakfast Show, Youth, Afternoon Hour, Drive Time, Prime Time and Graveyard Shift.
2) Airtime Rates (advertisements on radio) are usually in the range of Rs. 300 - Rs. 1100 per 10 sec slot in smaller towns and Rs. 2500 - Rs. 5000 per 10 sec in case of Metros
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