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Phase III delays continue to plague radio business

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Phase III delays continue to plague radio business

2015 was to be the year when radio was expected to reach the next level of growth but the constant delays mean that there is no resolution in sight for the industry.

With more than 800 stations across 239 cities up for auctions, the auctions were supposed to bring in a hefty sum to the exchequer.  However, with the first stage of the auction still to take place and getting delayed every month due to a number of reasons, industry analysts have begun to rethink their projections for the year.

Sam Balsara, Chairman of the Madison Group while launching the PITCH CMO  ad spend report said that radio ad spends have been pegged to grow by 6 per cent in 2015. When asked the reason for this, he said that this was due to the fact that the auctions are not expected to be complete by September. Some of the radio stations whose licenses were going to expire on March 31, 2015 have been already given an extension by MIB. Since then, the dates are getting pushed back every month.

Currently, the first stage of Phase III is now expected to be completed by June or July according to people familiar with the situation but there has been no official statement from the ministry.

Last week, the MIB finally gave the go-ahead for the acquisition of Radio City by Dainik Jagran, which had been one of the cases pending. However, the Home Ministry is yet to give security clearance to RED FM and Suryan FM, which are owned by Sun TV.

Nisha Narayanan, COO at RED FM, admitted that no official word has been received from the Ministry.

Another senior radio executive was a little more optimistic. “Any new station would have at least taken 10-12 months to become operational so there will not be any major impact on business,” he said. However, the fact remains that it is now looking highly unlikely that the entire process will be over by September. Any further delays beyond the deadline will have other ramifications on the quarterly and annual business figures .

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