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FM Radio Phase II bidding: Cakewalk for existing players, new players wonder if they paid a heavy price

FM Radio Phase II bidding: Cakewalk for existing players, new players wonder if they paid a heavy price

Author | Asit Ranjan Mishra | Saturday, Jan 07,2006 9:02 AM

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FM Radio Phase II bidding: Cakewalk for existing players, new players wonder if they paid a heavy price

The bids for the Phase II expansion of FM Radio stations in 13 cities across A+ and A categories were opened on Friday, beginning a month long process, where subsequent bids would be opened on the next four Fridays on a zonal basis.

The 13 circles in which 64 frequencies were up for bids were Delhi, Mumbai, Chennai, Bangalore, Kolkata, Lucknow, Surat, Jaipur, Kanpur, Ahmedabad, Pune and Hyderabad.

The confidence among the interested parties was obvious from the aggressive bidding, especially in the metros. But it were new players like Reliance controlled Adlabs, HT Music and Radio Mid Day, who led the race with their overenthusiasm.

Agreeing with this, Apurva Purohit, CEO, Radio City, whose company MBPL won in seven circles out of nine in which it had bid, observed, “The biddings of the already established players were as per expectations, but the new players were very aggressive. But the overall bidding was quite rational.”

Taking a similar line, A P Parigi, MD and CEO, ENIL (Radio Mirchi), whose company has won in all the seven circles it had bid, said, “The bids have been extremely rational as compared to the major hiccups in Phase I. After the telecom revolution, radio could be a even larger revolution in India.” About the migration fee that the incumbent players have to pay as per the guidelines, Parigi said, “ It is lower that what we had budgeted for.”

Taking a slightly different line, Reliance Entertainment President, Rajesh Sawhney, whose company has won in all the nine cities it had bid, said, “The variations in bidding are very high. But we have performed well. We are solely guided by our own business plans.”

However, another relatively smaller player, Dainik Bhaskar’s DGM (Projects) Sanjay Kumar Jain, opined, “The biddings are on the higher side. Everybody has to replan their business models to sustain in such a scenario.”

However, all big players seemed extremely pleased with the results, including another incumbent, the India Today group, which had sold its radio business to an NDTV consortium and had made fresh bids for the business.

“By following the exit and re-entry route, we have managed to save Rs 27 crore. Otherwise we would have had to pay Rs 50 crore, whereas now we made a payment of only Rs 23 crore,” said a more than elated Aroon Purie, Chairman and CEO, India Today Group. The group won in Delhi, Mumbai and Kolkata out of its nine biddings.

What surprised many in the media circle was the terribly bad performance of Zee’s Pan India, which was disqualified in all of its bids.

In Delhi, there were six frequencies up for grabs, for which there were seven bidders. Radio Mid Day was the highest bidder with Rs 31.4 crore. The others who made it to the final six were Adlabs (Rs 28.1 crore), HT Music (Rs 28 crore), Clear Media (Rs 13 crore), Radio Today (Rs 10.2 crore).

In Mumbai, there were four frequencies up for bid with an equal number of bidders. HT Music was the highest bidder with Rs 35 crore. Other successful bidders were Adlabs (Rs 28.10 crore) and Radio Today (Rs 10 crore).

Nine players were in race for the seven frequencies up for bid for Chennai. As in the case of Delhi, Radio Mid Day was again the highest bidder with Rs 12.2 crore. Adlabs was the second highest bidder with Rs 9.09 crore, whereas Muthoot Finance Pvt Ltd (Rs 8.6 crore), Music Broadcast (Rs 8 crore), Malar Publications (Rs 6.3 crore), Noble Broadcasting (Rs 5 crore) were the other successful bidders.

Nine bidders competed for the seven frequencies up for grabs in Bangalore. ENIL (Rs 28.16 crore) was way ahead as the highest bidder, followed by Sun TV group’s Kal Radio (Rs 20 crore), Adlabs (Rs 12 crore), and HT Music (Rs 6 crore).

Hyderabad witnessed a keen fight among 10 bidders for the seven frequencies. The successful bidders were ENIL (Rs 18 crore), KAL Radio (Rs 15 crore), MBPL (Rs 7.6 crore) and Adlabs (Rs 6.1 crore).

For Kolkata, five frequencies were available for bidding and there were nine interested parties. Adlabs was the highest bidder here with Rs 6.11 crore, followed by HT Music (Rs 6 crore), Anand Offset (Rs 5 crore), Radio Today (Rs 3.24 crore), and Radio Mid Day (Rs 3.21 crore).

In Jaipur, there were nine bidders for the five available frequencies. Rajasthan Patrika was the highest bidder with Rs 6.9 crore. Dainik Bhaskar’s Synergy Media (Rs 5.9 crore), South Asia FM (Rs 3 crore), and Radio City (MBPL) (Rs 3 crore) were the other successful bidders.

Lucknow saw a keen fight among five contenders for two frequencies with South Asia FM (Rs 14 crore) and ENIL (Rs 10 crore) emerging victorious, while in Surat, six parties competed for the four frequencies. The successful bidders were ENIL (Rs 3.6 crore), South Asia FM (Rs 3 crore), MBPL (Rs 2.5 crore), and Synergy Media (Rs 2 crore).

For Nagpur, six frequencies were up for bid with an equal number of contenders. But only four – ENIL (Rs 5 crore), South Asia FM (Rs 6 crore), Synergy Media (Rs 2 crore), and MBPL (Rs 1.5 crore) – made it to the list.

In Pune, South Asia FM (Rs 14 crore) and Adlabs (Rs 5.9 crore) came out as the winners.

Kanpur had three frequencies for which there were seven bidders. The successful contenders were South Asia FM (Rs 8 crore), ENIL (Rs 6 crore), and Adlabs (Rs 2.55 crore).

In Ahmedabad, five frequencies were up for bid with 10 hopeful bidders. At the time of filing the report, names of only three successful bidders were available – South Asia Broadcasting (Rs 15 crore), MBPL (Rs 6.5 crore), and Adlabs (Rs 6.1 crore).

From next week onwards, the I&B Ministry has decided to follow a zonal pattern for opening the bids – North, East, West and South zones – except in the A+ and A category cities. The opening of the biddings will end on February 3, 2006.

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