A senior executive of Radio City, (Star India's division which supplies content and handles the marketing and ad sales of FM radio stations for licence holder MBPL) admitted to indiantelevision.com that the huge gap between cost of running operations in places like Lucknow and the revenue being generated has "forced them to re-think on continuing with such operations."

"The licence fee for the Lucknow station is almost Rs 60 million, while the revenue trickling in is paltry. The business is becoming increasingly unviable and we may have to shut down operations there by the year end," he added.

MBPL (a company belonging to the PK Mittal group which has been in the news, for running up huge debts against funds which it had garnered for its steel business) completed one year of holding the licence for the FM radio station in Lucknow in November last year and has also paid the licence fee for the second year which comes to an end December 2003.

MBPL earlier had surrendered the licences for Nagpur and Patna and, if Star executives are to be believed, may do the same for Lucknow too "unless the government does something and comes up with a different viable business proposal."

Still, Radio City is readying to launch in Delhi, along with the likes of Radio Mirchi (an offering from the Times of India group) and RED from the India Today stable, in the February-March period.

At the instance and request of Prasar Bharati, Broadcast Engineering Council of India Ltd (Becil), a government organisation, is putting together the integrators for the private FM radio players. In some places, Prasar Bharati has also leased out its infrastructure to private players to start their radio operations.

Radio City-MBPL may also go in for places like Hyderabad and Pune during the second round of privatisation of radio FM, but only if the "business model is right and the government does away with auctioning of licences."

In a bid to generate the hype about the awards which will be later telecast on Star Plus, Radio City in Mumbai will air live the Star Screen Awards today evening .

"This is part of our endeavour to involve the average listeners too in the on-going glam shows in Mumbai and keep them updated on such events," a Radio City executive said.