TRAI pushes digital radio, but stakeholders question viability

With the Telecom Regulatory Authority of India (TRAI) unveiling its new digital radio policy framework, the industry stands at a crossroads. The move is being seen as a long-awaited technological leap even as it brings fresh challenges for private broadcasters already grappling with sluggish ad revenues and high operating costs.

While the announcement has been welcomed as a progressive step, industry voices caution that execution, affordability and receiver availability will determine the policy’s success and hence, broadcasters are approaching the framework with a mix of optimism and caution.

Also read: TRAI unveils digital radio policy framework

Nisha Narayanan, Director and COO, Red FM, called the recommendations a “long-awaited and progressive step toward a digital-first future for Indian radio.” According to her, the move to identify new frequencies, permit simulcast operations and adopt a unified digital standard could unlock innovation and content diversity. 

However, she adds while the vision is strong, timely execution and realistic pricing, particularly ensuring that the reserve price for bids reflects current FM revenue trends rather than past auction trends, will be key to success. 

Nevertheless, she highlighted that enabling digital receivers in cars and phones will also be critical for adoption. “TRAI has set the direction and now it’s about converting this intent into swift, effective action to keep radio’s growth momentum alive in the digital era,” she added.

Manoj Mathan, CEO of Radio Mango, believes the transition to digital may not be financially feasible under the current structure. “Going digital is good for the end consumer as it will lead to more choice of stations and better clarity. But is it good for the existing radio players? No. Our existing requests have not yet been addressed and asking us to transition to digital at such high costs will make it extremely infeasible,” he said.

He added that while digital could expand content offerings, it would also multiply costs. “Having four radio stations instead of one won’t lead to four times the revenue. Content creation costs for four streams will increase since each will have to be different in terms of programming. The migration policy should ideally be at zero fees, and digital radio should be offered to existing players at minimal cost for at least four to five years until the receiver base expands,” he said.

He also pointed out that digital radio remains dependent on special receivers which are currently available only in a limited number of cars in India. Radio Mango, he said, will not be affected immediately since digital radio, in the first phase, is restricted to 13 cities, none of which fall in Kerala where the network operates.

Also read: TRAI notifies reserve prices for FM auctions; industry flags gaps

Industry insiders also note that while the intent behind the policy is positive, it fails to address the deeper viability challenges confronting the sector. They argue that reserve prices remain high despite declining ad revenues and that smaller towns continue to face negligible advertiser interest. 

“Most large players, especially those listed, might exit the business if this continues. It’s a strong statement - but true,” said an industry player.

Unless reserve pricing is rationalised and government advertising support is extended, stations may struggle to survive. The situation mirrors the crisis facing community radio stations, which despite their social impact, remain financially unsustainable due to weak monetisation models. 

Without addressing these structural gaps, experts warn that both FM and community broadcasters will continue to face the same existential pressures regardless of whether the medium is digital or analog.

Also read: TRAI issues guidelines on FM Radio auctions

The proposal lays down the roadmap for this shift, setting out licensing conditions, auction rules and reserve prices for spectrum across key cities. Existing FM broadcasters will have the option to migrate to simulcast on a voluntary basis. For migration, they will need to pay the difference between the auction-determined price of spectrum in a city and the proportionate one-time entry fee already paid for their current licence period. 

A six-month window will be provided to exercise this option after the completion of the auction. Once broadcasters opt for digital services, they will be required to commence operations within two years. TRAI has also suggested that the government should decide on a sunset date for analog FM broadcasting at a later stage after assessing the pace of adoption.

In the first phase, TRAI has recommended the auction of two new spot frequencies in four A+ metros and nine A category cities. The reserve prices in the metros highlight the high commercial value attached to digital spectrum, with Mumbai set at Rs 194.08 crore, Delhi at Rs 177.63 crore, Chennai at Rs 146.68 crore and Kolkata at Rs 79.96 crore. 

Among the A category cities, Bengaluru carries the highest reserve price at Rs 87.22 crore followed by Hyderabad at Rs 65.85 crore. Other cities include Pune at Rs 41.26 crore, Ahmedabad at Rs 40.44 crore, Nagpur at Rs 29.48 crore, Jaipur at Rs 26.89 crore, Surat at Rs 25.89 crore, Lucknow at Rs 24.59 crore and Kanpur at Rs 20.52 crore.

TRAI believes that digital radio broadcasting will provide a superior listening experience compared to analog FM. It will enable multiple channels on a single frequency, allowing for greater content variety and new monetisation opportunities for broadcasters. The authority has called it a move toward a modern, spectrum-efficient future that could redefine the country’s radio landscape.

TRAI has also placed restrictions on market concentration, ensuring that no single entity can own more than 40 percent of the total frequencies in a city. At least three different operators must be present in each city to promote competition.

Additionally, TRAI recommends that digital radio services be launched in a simulcast mode, allowing a broadcaster to transmit one analog FM channel, three digital channels and one data channel on a single assigned frequency, a move expected to enhance programming diversity and enable new monetisation formats such as data-driven audio services.

While TRAI’s policy strikes a visionary note, promising a future of richer sound and greater spectrum efficiency, broadcasters are wary that without affordable instruments, in the form of realistic pricing, receiver access, and government support, the music may never reach the masses. The consensus is clear that India’s digital radio dream can hit the right frequency only when policy ambition and market economics play in tune.

However, if implemented well, the transition could open doors for new revenue models, especially in metros and large cities where listenership remains strong but advertiser returns have stagnated.