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Eliminate policy paralysis in FM sector, implore FM players to the new govt

Eliminate policy paralysis in FM sector, implore FM players to the new govt

Author | Abhinn Shreshtha | Thursday, Jun 05,2014 8:15 AM

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Eliminate policy paralysis in FM sector, implore FM players to the new govt

With the change in the centre and the new government’s promise of development and progress, private FM operators are hopeful that many long-standing roadblocks, including the Phase III migration, will be sorted quickly.

Last month, the Ministry of Information & Broadcast (MIB) put out an official request for bids from e-auctioneers to conduct the Phase III auctions of FM radio. The move, many FM operators, felt finally meant that they could see the long-delayed Phase III migration process start by year-end. Speaking at the Goafest 2014 on Sunday, Prakash Javadekar said that talks between the ministry and various FM operators were being undertaken to cull out the best way to move forward.

Apart from the Phase III auctions, there are a few other points that the radio fraternity want the government to address. Among them is the ban on independent news broadcasts by FM operators, the issue of FDI in radio, etc.

“The government must reduce channel separation from 800 KHz to 400 KH, a recommendation that the TRAI made more than two years back. Doing this will release at least 5-6 more channels in the larger markets, which will give broadcasters a chance to grow, listeners a lot of programming variety and, most importantly, the government a lot of incremental licensing revenues,” opined Prashant Pandey, MD and CEO of ENIL, which operates Radio Mirchi. Pandey also said that the MIB should also accept TRAI’s recommendations with respect to Phase II license extensions as it would ensure no disruption in the services of operators.

Vineet Singh Hukmani, CEO, Next Radio (Radio One), also spoke about the need for the new government to accept TRAI’s recommendations on the price discovery formula which he says will generate more than Rs 1, 500 crore for the exchequer even without auctions/bidding. “It is the quickest way for the new government to showcase tangible growth. It sets the tone for the radio industry to then command 8 per cent of the advertising pie from the current 4.5 per cent,” he said.

The radio industry has been the victim of severe apathy in recent years due to what many call a ‘policy paralysis’, with a number of key decisions being debated and formulated but never seeing the light of day. For example, as part of the Phase III transition, FDI in radio is expected to be increased to 49 per cent but an official announcement is yet to be made even though, as Pandey says, “all governmental processes were completed by the previous government.”

Speaking about this ‘policy paralysis’, Apurva Purohit, CEO, MBPL (Radio City) said, “This failure to expand has harmed not only job seekers, potential listeners but also small businesses and retailers who do not have the choice of a cost effective medium to advertise on to expand their businesses in these towns (which have been planned for under the Phase III expansion).”

Another important decision before the new MIB minister and his team will be whether to do away with the ban on news and current affairs broadcasts by private FM operators. This is a highly contentious issue with most operators bewildered on why a ban exists in the first place. Under the Phase III plan, the previous government had provided a sop to operators by allowing them to broadcast AIR news feeds, but operators want to be able to air programmes independently.

A major reason for this stand-off is thought to be the belief that AIR does not want to lose its monopoly on news. However, with the new MIB minister promising that development and modernization of Doordarshan and AIR will be high on the agenda, maybe there will be no need for this perceived insecurity over news and current affairs broadcasts.

Last month, Uday Chawla, Secretary General of AROI (Association of Radio Operators of India), the representative body for radio operators in India, had expressed hope that the ban on news would be rescinded by the end of year. It would be a revolution for the radio industry if this proves to be the case.

Apart from these policy issues, radio operators are also hopeful that a stable government will lead to economic growth and, hence, more advertising investment. “We hope to see good governance, an end to the policy paralysis and a focus on development, specifically infrastructure and thereby job creation,” said Purohit. The ball is now in the new government’s court whether it can address all these various issues that the radio industry wants urgently addressed.

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