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FICCI Radio Forum: Level playing field for FM radio and satellite radio players mooted

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FICCI Radio Forum: Level playing field for FM radio and satellite radio players mooted

“We are waiting to see the Phase II FM radio expansion on ground. We want to learn our lessons from that reality, tweak the policy for Phase III expansion accordingly, if required,” I&B Secretary S K Arora said while speaking at the seminar on ‘Indian Radio Industry: The way forward’ organised by the FICCI Radio Forum on November 13.

FM radio was just one important link in the chain of radio, he added. Hinting at opening up the sky for satellite radio, Arora said, “We have to provide a level playing field to both FM radio and satellite radio players. When we come out with the satellite radio policy, more players could enter the fray.”

On the community radio, Arora said, “The Ministry will soon announce further liberalisation of community radio policy. We have so far given licenses for 60 community radio stations. After the new policy announcement, we expect this number to go into several hundreds, if not several thousands.”

Stating the vision of the FICCI Radio Forum, A P Parigi, Chairman of the Forum and CEO, Radio Mirchi, said, “We wish to enter into a dialogue and engage with the regulator. This Forum will come out with working papers on a monthly or quarterly basis on the Internet.”

“FM radio listenership has seen tremendous growth from 76 million to 110 million in 12-14 months’ time. But it is just the tip of the iceberg as compared to what we will witness when all the 250-odd stations will be up in 89 cities. The industry has seen half a billion dollar investment within just 24 months, which is unheard of in any other segment of the entertainment industry,” Parigi pointed out.

Speaking on the session ‘Regulatory Framework for Radio industry’, Neil Curry, Senior Commissioning Editor, BBC World Service, said, “The regulator should focus on outputs (what listeners hear) rather than inputs (how programmes are made). In the UK, the regulator Ofcom functions with the strategy to enhance choice, diversity and innovation in the sector.”

Giving his view on the regulator’s role, TRAI’s A K Sawhney said, “The regulator should regulate when necessary, not when possible. Our focus as a regulator is to expand the market, ensure more competition, allow new technologies and services. The Phase III expansion should also be guided by these principles.”

Commenting on the Broadcast Bill, Rajat Sethi of S&R Associates, said, “The existing Broadcast Bill has been made keeping television in mind, not radio. The Bill does not provide guidelines regarding meaning of public service or socially relevant programme content.”

Prasant Pandey, Deputy CEO, Radio Mirchi, said, “We have the opportunity to make the radio industry the next telecom industry. The Indian FM radio industry has the potential to reach 13 per cent of the ad pie, which will be its legitimate place.”

Pandey also called for allowing multiple frequencies to an operator in a single city, permitting consolidation in the industry and privatisation of the AM radio.

Smita Jha, Principal Consultant, PriceWaterhouseCoopers, said, “Consolidatioin of advertising inventory will help the industry as it will reduce the number of sellers and will be easier for advertisers to put their commercials on radio. Thus, FM stations can also garner premium for offering a consolidated buy.”

Speaking in the session ‘Financial Architechtre for Radio Industry’, Gaurav Gupta, N M Rothschild & Sons, said, “In 2015, FM, digital and satellite radio will be co-existing. There will be ample content available for listerners and Bollywood won’t be a pre-requisite for growth. Most of the people will be listening radio on their mobile phones and people might wonder what a radio handset is!”

Giving the investors’ perspective, Salil Pitale, Enam Financial Consultants Pvt Ltd, said, “For investors, it is the size of the opportunity that matters. Investors would be interested in taking a small pie of a large market rather than a large pie of a small market.”

Sangeeta Anand, Senior Vice-president-Corporate Finance, Yes Bank, said, “The revenue model of the FM industry has become more robust, hence debt financing opportunity has increased. But the industry is still very fragmented and there is limited role for debt financing as capital expenditure is low. Radio might go through a phase of evolution.”

Meanwhile, raising concern over the inflating salaries in the radio sector, Sunil Kumar, MD, Big River Radio (India) Pvt Ltd, said, “Salaries itself constitute 27.1 per cent of the ongoing expenses of a radio station. As there is a limit to which one can increase the revenue, any savings on the cost front should be considered revenue.”


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