MUMBAI: Friday the 13 which is usually termed to be a bad omen brought some important news for the radio fraternity, as the Information & Broadcasting (I&B) minister Manish Tewari announced that Phase III auction of FM radio is all set to commence in October. For some players the news brought cheers and for a few others a wave of apprehension.
Reacting to the news, ENIL CEO Prashant Pandey said, “Radio Mirchi has been prepared for auctions for a long time now. However, the Phase III policy has several chinks and the radio industry, represented by AROI, has unanimously asked for revisiting the high reserve fees.”
Meanwhile, Radio City CEO Apurva Purohit expressed her excitement and is looking forward for the auctions. “We are really very excited with this announcement and glad that the government finally living up to its promise,” exclaimed Purohit.
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During the Budget Session 2013, the Finance Minister P Chidambaram announced that the government proposed to expand private FM radio services to 294 more cities. The government said that about 839 new FM radio channels will be auctioned in 2013-14. The talk on Phase III was on pending for a while.
“The industry has waited for this for a very long time. The pricing and roll out must be kept in mind. Owing to the present depressed economic scenario the players must not bid blindly,” advised Radio One MD and CEO Vineet Singh Hukmani.
Meanwhile, Pandey further said that with high reserve fees, industry participation will be limited. The government will fail in auctioning off a bulk of the spectrum. It will be a repeat of the 2G fiasco. In some markets, the high reserve fees, combined with shortage of spectrum, could lead to irrational bidding. “This will again harm the industry. Like in telecom – where operators are cutting on service quality because all their money is blocked up in spectrum fees – the same could happen in FM radio also,” warned Pandey.
Pandey considers this auction in lines with 2G auction. He added, “Many towns will simply not see any bidding. But more worrisome for the government will be markets where a few licenses are bid out and a lot of others are not. That unsold spectrum will get stuck.”
He further stated, “Its better the government reduces reserve fees – just like TRAI has recommended in 2G – and then go with auctions. It should refer the matter to TRAI immediately with a request for a quick recommendation. The government can still meet its goal of completing auctions during this financial year.”
94.3 MY FM CEO Harrish M Bhatia said that there are challenges which the government will have to address. “We have all seen how the telecom auctions failed, so I am sure in radio also they will make the necessary changes once they understand the challenges,” Bhatia added.
Talking about the foreign investment, CEO of Radio Misty Nishant Mittal said, “Radio is growing in slow phase in terms of revenue, but phase III will open more avenues of revenue. I don’t think at this stage foreign investors are willing to invest in Radio Industry, but hope things changes soon.”
“Higher prices at the auction will not just deter foreign investors but also the current players in the industry who wish to branch out to newer centres,” Bhatia concluded.
