FM radio industry posts 60% growth

Driven by the launch of 50 new private FM radio stations as part of government's second phase expansion plans, the FM radio industry has registered 60 per cent growth in 2006 within the media and entertainment sector.

FM radio generated advertising revenue in excess of Rs 500 crore in 2006, according to radio industry estimates. These numbers will be part of the upcoming Ficci-PricewaterhouseCooper report on media and entertainment sector which will be released in Mumbai next month, industry sources said.

The media and entertainment sector will continue to grow at 20-22 per cent. Last year, the Ficci-PWC report had indicated 32 per cent growth for the FM radio industry on a base of Rs 300 crore revenue generation. This was based on second phase rollout of private FM radio expansion plans by the Ministry of Information and Broadcasting.

"The boom in FM radio is driven by the anticipation of an increase in the foreign direct investment (FDI) cap from current 20 per cent to 26 per cent or even more and the permission to broadcast news and current affairs," a media analyst said.

The shift to revenue-sharing arrangement in the second phase is also responsible for the high growth, the analyst added.

"Radio as an industry may cross the Rs 10,000-crore mark within couple of years. Currently, over Rs 3,000 crore worth of investments have already been made and the third phase could very well see setting up of support industry to further fuel the growth and investments," an industry analyst said.

Within this year, all the 270-odd private FM stations will be operational. Also, the government has already indicated the possible rollout of another 700 FM stations in the third phase which will sustain the high growth rate of the radio industry.

For the third-phase of FM radio expansion, industry is expecting an investments of another Rs 5,000 crore.