Zee Telefilms: 40. Bennett, Coleman: 40. News Media Broadcasting (part-promoted by Subhash Chandra's brother, Jawahar): 40. Vertex Broadcasting 30. Observer: 16.
That's just four of the 103 companies that have put in 360 applications for FM radio licences. The prize: 108 FM licences covering 40 cities for which the government partially opened bids yesterday.
The frenzy was all too evident in the committee room of the Information and Broadcasting ministry on the sixth floor of Shastri Bhavan, where bids were opened for the four metros. The big names were out in force: Deepak Shourie of Zee, Arun Arora of Bennett, Coleman, Mohit Burman of Dabur and A Shankar from Reliance, to name a few. Delhi has attracted the highest number of bidders, 28, followed by Mumbai (26 bids), Chennai and Bangalore (20 each), Hyderabad and Pune (16 each), Ahmedabad (14) and Calcutta and Lucknow (13 each).
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The big Indian media groups may figure among the mega-applicants. But the list also figures a Pepsi bottler, a shipping company, finance firms, consumer goods manufacturers, hotel owners even gutka makers...
"There's no business like radio business," says Avtaar Litt, who runs Sunrise Radio, an ethnic station in the UK and has tied up with a big Pepsi bottler, the Jaipurias, for Hindustan Broadcasting Company which has bid for eight licences for all the major cities.
The licences include 11 each in the four metro cities (except Mumbai, which has 10) to seven in Pune, five in Indore and smaller numbers in B and C class cities like Jamnagar, Chandigarh, Varanasi and Vizag among others.
Now, with the number of aspirants in most cities exceeding the number of licences by a generous margin, the government plans to go in for an open auction in which the reserve price will be enhanced 10 per cent every time till the number of bidders equals the number of licences. The government has fixed a reserve annual licence fee in various cities for the stations which range from Rs 1.25 crore in Delhi to Rs 20 lakh for cities like Varanasi.
Why are so many companies crowding the airwaves, especially since the entry barriers are not all that low? After all, setting up a station costs about Rs 7 crore (including licence fee) and annual working capital requirements could be as high as Rs 3 crore.
But companies anticipate a substantial shift in advertising revenue from TV and print to the cheaper and more cost-effective FM radio, with its offer of targeted audiences.
By conservative government estimates, radio is expected to grab at least 3 per cent of the total ad spend in the first five years of operation of FM and at least 4 per cent in the next five years.
In 1999-2000, the government had estimated that as much as Rs 93 crore of ad revenue (out of a total of Rs 6,600 c