fm radio industry: Govt’s reforms lifeline for Covid-hit FM radio industry

The federal government has accepted three long-pending calls for of the Indian non-public FM radio trade, signalling reform of the sector that was badly hit by the pandemic. These embrace simplification of economic eligibility norms to permit firms with a internet price of Rs 1 crore — as an alternative of Rs 1.5 crore earlier — to take part within the bidding course of for class C and D cities; removing of the three-year lock-in for restructuring; and the longstanding demand to take away the 15% nationwide cap on channel holdings.

The choice was taken on the Cupboard assembly chaired by PM Narendra Modi final week and, accordingly, the federal government has accepted the amendments to the FM Radio Part III coverage tips, mentioned a press release issued by the Data & Broadcasting ministry.

Affiliation of Radio Operators of India (AROI) president Anurradha Prasad thanked I&B minister Anurag Thakur and secretary Apurva Chandra. “After ready for a few years, the radio trade has lastly obtained this reduction,” she mentioned.

AROI mentioned in a press release that these measures will make it considerably simpler to do enterprise. “The reforms will make it financially simpler for small radio broadcasters to take part in future auctions and can facilitate mergers and acquisitions within the trade,” it mentioned.

Earlier, FM radio firms had solely a three-year window for restructuring of FM radio permissions inside the identical administration group in the course of the licence interval of 15 years, which affected valuation, as they may not be acquired by bigger gamers.

The brand new amendments will enable severe buyers to search for acquisition alternatives and supply exits to smaller or present ones. Equally, the nationwide cap of 15% meant that large firms wouldn’t wish to launch stations in smaller cities however think about massive city areas. With the nationwide cap withdrawn, large gamers can take a look at smaller cities too for enlargement.

“Elimination of the lock-in is a really large transfer,” mentioned the pinnacle of a non-public FM firm. “Earlier, there have been no large gamers for smaller cities on account of these circumstances. Now the demand for smaller cities can be there and personal gamers can be enthusiastic about smaller cities too.”

Specialists added that the discount within the minimal monetary eligibility norm will encourage smaller gamers that wish to provide non-public FM companies in areas exterior the large cities an opportunity to increase. The federal government is of the view that the three amendments will assist the non-public FM radio trade to completely leverage economies of scale and pave the best way for additional enlargement to tier 3 cities.

“This is not going to solely create new employment alternatives but in addition make sure that music and leisure over the FTA (free-to-air) radio media is offered to the frequent man within the remotest corners of the nation,” the federal government mentioned.

Prasad instructed ET that whereas these measures are welcome, there are different important points that want pressing consideration from the federal government. These embrace rationalisation of the annual licence payment and a rise within the licence interval by a minimum of three years to offset the disastrous influence of Covid-19 on the radio trade. “Ours was one of many worst-affected sectors as our revenues are depending on retail promoting,” she mentioned. Trade gamers anticipate to return to pre-pandemic income numbers solely after two extra years, in FY25.

Radio broadcasters have incurred losses within the two Covid years, working into lots of of crores. The trade has already invested closely, having paid all the public sale charges upfront to the federal government.