Radio industry optimistic about leftover Phase II channels merger with Phase III

The Ministry of Information and Broadcasting (MIB) on August 28, 2008, issued a circular to industry players, announcing that the bidding of vacant channels of FM radio in Phase II be cancelled. Instead, ‘a combined tender be floated in respect of vacant channels of Phase II and channels of Phase III’, the MIB circular stated.

The Government is also considering the formulation of a fresh policy in this regard. After the formulation of the new policy in respect of Phase III, the tendering process for the vacant channels of Phase II and channels of Phase III would be initiated, the notification added.

The Ministry had earlier in its notice dated January 11, 2008, informed the eligible bidders that the date of financial bidding has been postponed.

The battle for key vacant stations is expected to be between Reliance Unicom Ltd (Big FM), Entertainment Network India Ltd (Radio Mirchi), South Asia FM (Sun TV), and regional players such as Rajasthan Patrika, Ananda Offset Private, Shri Puran Multimedia (Dainik Jagran) and Synergy Media Entertainment (Dainik Bhaskar Group). These FM players were in the fray for the FM slots, bidding for which was originally scheduled for November 12 and 26, 2007, but was cancelled just five days before the bidding. The new dates given at that time were December 17, 2007, and January 7, 2008, which were later changed. These were revised to December 29, 2007 and January 10, 2008, only to be postponed yet again to January 14 and 24, 2008.

It was considered as a major setback for the radio industry and various industry players have their own take on the latest development.

According to AROI President Apurva Purohit, “It makes better sense for the remaining 80 licenses under Phase II to be given out after deregulation is brought in with Phase III. While some of the broadcasters who were interested in bidding for the licenses currently would have to wait a little longer, the final outcome would be positive for the industry as a whole as the larger issues of FDI, news and current affairs and multiple licenses per city are likely to be addressed by the time the consolidated licenses are brought under the hammer in Phase III.”

Anurradha Prasad, Managing Director, BAG Films & Media Ltd, said, “It is a major setback for the radio industry. We are waiting for the Government to combine Phase II and III radio policy as the radio industry has gained momentum. I hope the Government takes a call soon. Our plans for Phase III would primarily depend on the number of frequencies, type of frequencies and formulation of the new policy.”

Prashant Panday, CEO, Radio Mirchi, commented, “Now the phase III rollout should be as soon as possible, since it would be the right thing to happen for the industry. If not, then the Government needs to go ahead and finish the Phase II, or else we would be in a situation where neither the Phase II nor the Phase III happens. However, we are getting strong vibes from the Government for the Phase III, but what we need is a strong action from them. There are 90 frequencies pending in Phase II and 700-odd frequencies in Phase III. When they announce Phase III, they can combine the Phase II frequencies.”

Tarun Katial, COO, Big FM, said, “The combined Phase II and Phase III, as decided by the Government, should happen as soon as possible. We are definitely looking forward to multiple frequencies in same city. Radio as of now is holding on to the growth momentum and the Phase III rollout should happen soon to hold the momentum. FM provides entertainment in Tier 1-2 cities, where Phase 2 was planned.”

Having a different take, S Keerthivasan, Business Head, HT Music and Entertainment, said, “We are definitely disappointed with this move. However, I see no reason why there should be any adverse repercussion of this on the industry.”

According to Nisha Narayanan, Project Head, SFM, “At a time when most of the industry players have not achieved break even point, and the industry is in a consolidation mode and trying to iron out infrastructure, in such a scenario a Phase III rollout could be too soon. In the meanwhile, until the Phase III is announced, the industry should utilise this time span to consolidate and generate more revenues, and sort out all their problems internally. I see these few months as a breather for the industry and the move by the Government to merge the bidding of the vacant channels of FM in Phase II with Phase III should be taken positively.”

Narayanan further said, “The sooner the Phase III rollout, the better, but the Phase III policy should be more enabling and should consider most of the recommendations made by AROI, TRAI and others. The bidding process should also be reconsidered and must not be the same as that of Phase II.”

Sunil Kumar, MD, Big River Radio, felt, “Today we have more stations and more choices, even for advertisers there is increase in reach and increase in several stations in districts as well. If the Government follows TRAI recommendations, it would be fantastic. I see the current move by the Government to merge the vacant channels of Phase II with that of Phase III as a progressive move, and if the Government is ready to give more channels, then we need to gladly receive it, and yes, I am completely bullish about Phase III.”

Whatever the Government decided – be it merging the leftover Phase II channels with Phase III or a complete rollout of Phase III – it should happen as soon as possible to sustain the growth momentum seen in the radio industry. Is the Government listening?

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