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1 Year Of Modi Govt: Radio sector no longer in limbo

13-May-2015
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1 Year Of Modi Govt: Radio sector no longer in limbo

As the BJP government nears one year in power, it has earned bouquets as well as brickbats from the industry. Though there are those who feel that the government has not lived up to its promise of bringing industrial and economic reforms in the country, there are also supporters who are content with the pace at which certain bills and reforms have been introduced and pushed. One sector that has been quite optimistic with the change in government has been the private FM sector.

With the PM proving himself to be an ardent supporter of radio, he has utilized the platform in new programs like ‘Mann Ki Baat’ as well as to promote government initiatives like ‘Swachh Bharat Abhiyaan’, etc. These initiatives have increased government spending on radio. “All these government initiatives have been directly launched through radio. The government is really bullish about the medium and because of this earnings might also go up,” Vineet Singh Hukmani, MD of Radio One. When asked about how much would he rate the Modi government’s one year, Hukmani gave them a 7 saying radio has still performed far better than TV and print.

In a more indirect manner, the positive sentiment in the industry has contributed to increase in spending on radio. “Spends from auto and real estate having increased due to positivity in the market,” claimed Hukmani. However, the government should now ensure that bills like GST and Land Acquisition bill are passed as soon as possible as this will further improve business sentiment. Another important thing that is will need continuous attention to encourage local retail as this sector is perhaps the most important for radio revenues.

“In the coming six months, the government should look at quickly taking a call on GST and other bills while lowering interest rates as this will increase the confidence of corporate India,” added Hukmani.

However, perhaps the most important contribution of the government has been green lighting the Phase III auctions, something that has been in limbo for years. Even though there have been some complaints, mainly about the government’s inflexibility regarding reserve prices for new cities, overall, radio operators seem to be happy that the policy paralysis that has plagued the radio industry for so long seems to be ending.

The first stage of the Phase III auctions is now expected to be held by the second week of May. Though there have been delays, the six month license extension provided to operators whose licenses were expiring on March 31, 2015 has also helped allay most of the fears.

Moving forward, the government should now ensure that the Phase III auctions are carried out without any hurdles or further delays as this will only help the further expansion of radio in India and provide more revenue opportunities for the FM operators.

Many radio operators were also of the opinion that the government has focused on carrying out the Phase III auctions to the exclusion of other radio related matters. The reason of course is that they did not want to cause further delays. Once the auctions are all completed, the Ministry of Information and Broadcasting (MIB) and other concerned parties might endeavour to find solutions to these. For example, one of the things some radio operators had requested the government was to accommodate more frequencies in each city by reducing the gap between frequencies. Though this suggestion has been declined till now, maybe, the MIB could revisit these and other suggestions by radio operators at a later date post the auctions.

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