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Business News/ Industry / 28 firms apply to participate in auction of private FM channels
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28 firms apply to participate in auction of private FM channels

Applicants include Reliance Broadcast Network, DB Corp., Entertainment Network

Radio companies are looking to expand their footprint in India and fill up gaps in their existing network. Premium
Radio companies are looking to expand their footprint in India and fill up gaps in their existing network.

New Delhi: The ministry of information and broadcasting received applications from 28 companies to participate in the auction of 135 private radio FM channels across 69 cities as part of the first stage of Phase III expansion.

Reliance Broadcast Network Ltd (92.7 Big FM), DB Corp. Ltd (94.3 MY FM), Entertainment Network India Ltd (98.3 Radio Mirchi) are among applicants who have cumulatively deposited 316.91 crore as earnest money, the government said in a statement on Wednesday.

The latest radio auctions are happening after a gap of nine years.

“After scrutiny and subject to fulfilment of requirements as prescribed in the Notice Inviting Applications (NIA) dated 2nd March 2015 a list of pre-qualified bidders will be prepared," the ministry said in a statement.

The list of government approved-bidders is expected to be out by 17 April.

Radio companies are looking to expand their footprint in India and fill up gaps in their existing network. FM Phase Ill Policy plans to extend FM radio services to about 227 new cities, in addition to 86 cities where such services exist.

The Phase III policy will result in coverage of all cities with a population of 100,000 and above.

“The expectation is that successful radio players will want to expand their footprint to cities where they are not present, filling gaps in their network," said Harshad Jain, business head for Fever 104, the radio station operated by HT Media, the publisher of Mint. Fever 104 has also submitted an application to participate in the auction.

Prashant Pandey, managing director and CEO of Entertainment Network India Ltd, the company that operates Radio Mirchi, hopes that the bidding will be rational.

“The radio business cannot be viable if irrational bidding happens. More frequencies are going to be released. So there is no reason for irrationality. I also hope that the government succeeds in auctioning most of the 135 frequencies. I’m worried at least 30-40 may not get taken up because of high reserve fees and because big broadcasters are being limited to just 52 frequencies," said Pandey.

The Indian radio industry’s 2014 revenue grew 17.6%, one of the highest rates among traditional media segments, according to a report jointly published by the Federation of Indian Chambers of Commerce and Industry, and consulting firm KPMG.

The sector is expected to grow at an annual average growth rate of 18.1% till 2019, according to the report.

Still, radio companies face challenges including high reserve prices for the auctions, a 15% limit on the total number of frequencies that an entity can hold and the dearth of new frequencies in the profitable A and A+ cities.

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Published: 02 Apr 2015, 01:07 AM IST
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