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Business

India set to become the 'biggest radio market' in the world

Commercial radio companies and media organizations in India are poised to respond to the start of the third phase of licensing for commercial FM stations.

Sadhus listen to the cricket world cup final match commentary

Radios are popular in India and can even be accessed over cellphones

"People in this country like to have FM especially because radio is available to them in remote corners of the country even where there is no electricity. They can listen to it even when they are moving," says Dr. H.O. Srivastava, former head of engineering at All India Radio (AIR), the Indian government's official radio station. He is now leading the World Development Foundation (WDF), a consultancy which works for the rural poor using the radio.

More choice for radio buffs

Phase III of the licensing of commencial FM radio broadcasters, as it is known in official jargon, is set to become a big event, promising a wider coverage for listeners in remote areas and tremendous opportunities for advertisers. "A lot of new content is going to come," says Uday Chawla, general secretary of the All India Radio Operators Association (AROI). "There could be general social issues, education or employment," he adds. Until now, FM listeners in India have had little to choose from when it comes to programs. Most FM radio stations concentrate almost entirely on music.

At a transmission studio in Prague

FM radio in India is poised to attract many foreign investors

For Chawla, one exciting aspect about Phase III of the granting of FM licenses is the fact that a particular company can now have up to 40 percent of FM stations in a city and up to 15 percent nationwide. While the final auction for licenses is expected to be held in January 2012, Chawla expects the first stage of selection to be some time around next month.

Locking horns over news

However, the Indian government is still wary when it comes to allowing commercial FM stations to broadcast their own news. WDF head Srivastava says, "So far, the government of India has not allowed independent news on the radio, but commercial channels will be able to share the news broadcast by All India Radio." This issue seems to have reached a roadblock, with commercial radio channels complaining about the government’s inflexibility on the issue.

But for Chawla, India is a democracy and therefore, every channel has the right to produce and broadcast its own news bulletins. Chawla says the FM owners association understands the government’s concerns when it comes to monitoring content and ensuring that there is nothing offensive, but he firmly believes that FM companies will soon be clamoring for independence and freedome to provide information. "India is a democracy," he says, and when the time is right, the people of India and the parliament will take the right decisions in this regard".

The next big money spinner

At the Manas wildlife sanctuary in Assam

Areas like Assam in Northeast India have special subsidies to improve investment

As of now, the time seems definitely right for foreign companies who want their share of the radio-pie with the bidding about to start for more than 800 radio stations in nearly 220 cities. The government has also increased the maximum foreign direct investment in a radio station (FDI) to 26 percent of the total holding in a company. This allows foreign investors to place their own directors on the board of companies which they invest in, says Chawla, adding that it makes sense for foreign investors to invest with bigger operators in big cities, because the growth rates in the radio market will be very high.

"New markets are going to open up..new markets, which were hitherto untapped," claims Chawla, referring to the government’s plans to distribute licenses at reduced costs for stations in remote states like those in Northeast India and in Jammu and Kashmir, where separatist movements and law and order problems have kept investors away until now.

According to Chawla, radio accounts for four percent of the media market in India and predicts 50 percent growth in the Indian radio industry in the first year after licensing. His prediction: radio in India is set to become the biggest radio market in the world.

Author: Manasi Gopalakrishnan
Editor. Grahame Lucas

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