The government is set to auction its largest stack of FM radio licences yet, with a notification expected in a month — a move that will likely bring in an estimated Rs 2,500 crore in revenue, boost entertainment-sector jobs in smaller towns and connect underserved audiences.
The sale, when complete, will provide the country with 839 radio channel licenses across 294 new cities, in addition to existing ones. A batch of 135 licences for 69 town and cities will be the first ones to be auctioned at a reserved price of Rs 550 crore. The total reserve price for 839 licences is Rs 1,531 crore.
India currently has about 243 frequency-modulation stations that dish out music-driven entertainment fare, commonly known as FM radio.
The roll-out could result in a radio boom with implications for job opportunities in so-called tier IV and V cities and overall media-sector growth. A radio-spangled broadcast economy is likely to trigger demand for both employable manpower and training from job-seekers. Stations typically require sound engineers, digital radio operators, recordists, technicians and script writers, apart from jockeys.
Radio, poised to grow by 18% during 2014-19, is now a key medium to reach the middle class for all kinds of advertisers. In 2014 Lok Sabha elections, for instance, political parties spent up to 15% of their campaign budgets on radio spots, according to consultants KPMG.
The information and broadcasting ministry, which administers commercial radio spectrum or bandwidth, has finalised the bidding process. This will be entirely done online and, therefore, known as e-auction, adopted to ensure transparency after the scandalous 2G spectrum sale. The ministry has outsourced the process to e-auctioneering firm C1 India Private Ltd through a tendering process.
Since a bulk of these stations will be in smaller towns, companies are expected to go in for “protect differentiation”. This denotes regional and local content mixed with staple Bollywood-based fare.
The new roll-out will also spur the telecom business. FM radio firms in India derive 30% of their listenership from mobile phone users, according to consultant Ernst and Young, while an average listener spends up to 14 hours a week on FM radio.
When the phase III’s 800-plus stations are sold, the private radio sector will reach 85% of the country’s area, according to KPMG.