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On January 16, when the Cabinet gave the go-ahead for the first part of the third-phase of FM radio frequency auctions, radio companies heaved a sigh of relief collectively. The process, which has been stuck for three-and-a-half years, is now expected to be completed by the end of the current financial year.
With as many as 839 frequencies up for grabs across 227 cities and towns, radio station operators need to have a focused plan of action.
Radio City, led by CEO Apurva Purohit, will be focusing on expanding to 40 cities. It is currently present in 20 cities: Mumbai, Delhi, Bangalore, Chennai, Ahmedabad, Pune, Hyderabad, Lucknow, Jaipur, Vadodara, Surat, Sholapur, Nagpur, Sangli, Coimbatore, Vizag, Ahmednagar, Akola, Nanded, and Jalgaon.
The company's strategy has been to target the SEC A and B sections of listeners. Currently, Radio City has a 50 per cent market share in SEC A and B segments. In order to retain this share, after the 800-odd frequencies have been auctioned in phase-three, the company will need 35-40 stations.
For phase-two, Purohit said the company was not looking at expansion aggressively. Being one of the first entrants in the business, Radio City had set an agenda of operating in markets that provided a balance of high advertising potential and relevance across the country. "We needed just enough presence to remain relevant to our core target group - SEC A and B - and at the same time, operate in cities (mainly the metros and mini metros) where the advertising potential is higher," Purohit had earlier told Business Standard.
This time around, the strategy takes into consideration maintaining the market share it has built over the past decade and expanding the footprint across SEC A and B.
For My FM, the strategy will be to build and strengthen presence in the territories where the parent group, DB Corp, has presence through the print medium. "We have always been non-metro centric and will continue our focus on the same," says Harrish Bhatia, CEO, My FM.
With a focus on north, west and east India regions, MY FM plans to expand its presence in these regions by 70-80 stations. In case of the bigger non-metros such as Jaipur, the station might pick up a second frequency during phase-three auctions.
Radio Mirchi will be looking at the process in tranches since there will be two segments of auctions. In the first segment, 56 stations will be auctioned. "We already have presence in 32 of those cities and would want to increase that presence. Additionally, we may also pick up a second frequency in some of the cities we already have presence in," says Prashant Panday, CEO, Entertainment Networks India Limited (ENIL), the company that runs Radio Mirchi 98.3 FM.
News on private FM
The radio phase-three policy outlines private FM radio channels will be allowed to carry news from All India Radio (AIR). Currently, there is a restriction on these channels, which forbids them from broadcasting news content of any kind. Under the phase-three policy, they will be allowed to air AIR news.
Besides, broadcast pertaining to the certain categories such as information pertaining to sporting events, traffic, weather, cultural events, festivals, examinations, results, admissions, career counselling, employment opportunities will be permissible.
However, private FM players have doubts about this provision in the policy since there is no clarity on how the news from AIR can be treated. "For one thing, we do not know if we have to pay for it. Secondly, there is a difference in the quality and execution of content on AIR and our channels. We do not know if switching to the AIR feed will disrupt the listeners' experience. Also, those of us who have synergies with news vehicles as part of the parent network, would not want to simply parrot the state broadcaster's views and news," says a radio company executive.
Having news, however, will give the radio channels some content differentiation. The channels all agree that it will also give them some upside in terms of ad-rates, but say the exact number cannot be ascertained till there is clarity on the policy. "We need clarity on how the AIR news can be used. We will come to know more on the impact once the final migration policy is out," says Bhatia.
