MUMBAI: As expected, the Union Budget has evoked mixed reactions across sectors, but the private FM radio industry is extremely delighted. Although the Finance Minister P Chidambaram did not announce anything new for radio in the Budget, but a helping hand from government in support to commence the FM phase III auction at the earliest brought a wave of relief to the industry.

As reported by Radioandmusic.com, the minister announced that around 839 new FM radio channels will be auctioned in 2013-14.The government has proposed to expand private FM radio services to 294 more cities. Additionally, all cities having a population of more than 100,000 will be covered by private FM radio services.

The phase III auctions have been bound by many delays and confusions along the way. Having already been postponed by a year, the issue of reserve price and e-auctions were another major hurdle in its progress. But with the government now showing some sign of support, the industry is hoping that the auctions will be held in 2013-14.

Speaking with Radioandmusic.com, Association of Radio Operators for India (AROI) president Anurradha Prasad says, “It is a welcome step for us. This has been on the UPA’s agenda from the past three to four years and now it has finally come about. The phase III expansion will be a boost for the industry and the existing players can extend their reach which will also result in new opportunities opening up in advertising, which will  in turn benefit the broadcasters. Moreover the content will also be differentiated as there will be more number of players which will also fuel employment.”

According to industry sources auctions will be held in July this year or in early 2014. AROI secretary general Uday Chawla is highly awaiting the auctions. “We welcome this move by the government. We have been hearing a lot about it but it was delayed for a year and was on hold due to many issues. Now that it has been announced, we are hoping that the auctions will take place as soon as possible," he says.

FM phase III expansion will help in the overall growth and penetration of the radio industry. "When you enter new markets, you create more revenue generating streams to double the growth,” he adds.

Radio Mirchi executive director & CEO Prashant Panday feels that the announcement is a ray of positive hope for the radio industry, but prompt action is needed from the government. "We are happy that the Finance Minister announced the imminent launch of phase 3 of radio expansion. With this, we hope all hurdles to the launch of phase 3 are now removed. We hope quick action follows this announcement," he says.

Reliance Broadcast Network Ltd CEO Tarun Katial says, “The Budget brings good news for the radio industry, with phase III poised to create optimal reach for the medium. Other benefits like news, networking, current affairs and sports, multiple frequencies and more, will add the necessary fillip to further fuel listenership growth through reach and content diversification driving profitability and revenue through cost optimization. With deeper penetration, radio can play a key role as a catalyst of social transformation through partnership for CSR initiatives, social causes and government initiatives, as it reaches where no other medium can because of literacy and cost issues. With expansion to over 300 cities, it stands to reach 90 per cent of the Indian population, making it truly, a common man’s medium.”

Even as the radio industry reacts positively to the government’s commitment towards the expansion policy, many broadcasters are still a bit wary and are treading cautiously. With high fees and the e-auction methodology evoking a mixed response, the broadcasters claim that the final policy will determine if the auctions will prove beneficial for the radio industry or no.

Red FM senior VP projects and programming Nisha Narayanan says, “It is indeed a very good news for the radio industry, we welcome it and are now waiting for the auctions to come in. But there is still some clarity required in terms of licenses, what kind of investment is required and more. The policy concerns need to be addressed. The auctions will bring in growth for the FM radio players through more listenership. Inspite of that, I think the final policy will determine if we have so many bidders, considering the reserve fees. But radio is growing in smaller towns and not only metros and we need to boost it further, which can be done with the phase III expansion.”

The growth in smaller cities is increasing today, and it is set to become the focal point for most players in the long run. Metro markets today are largely occupied by big players and do not possess much area for penetration and connect with the audience. On the other hand, smaller markets still remain unexplored and with less fees acting as a boon, it thus proves to be a better option for radio players to set up.

Agreeing with the same, Radio One Ltd MD and CEO Vineet Singh Hukmani says, “We are happy that the Finance Minister has 'committed to Phase 3' in the Budget with a special focus to spread FM radio to the smallest C and D towns. This is a smart move by the government in a difficult economic situation as chances of success in lower reserve price small markets is higher. Furthermore metro licenses even in telecom spectrum bidding have not thrown up any buyers due to their exorbitant prices and huge competitive pressure in metro cities. The next move that the ministry should make is allow migration of existing players to Phase 3 and signing of GOPA to allow 26 per cent FDI, networking and a level playing field with AIR and other media.”

Radio City CEO Apurva Purohit says,“We welcome the announcement of Finance Minister on the government’s resolve to expedite Phase 3. This impetus would help FM radio expand and offer the choice of consuming private FM radio to millions living in smaller towns. We are looking forward to the same.”