FM radio II: Rs 5 bn+ licence fee in 1st round

NEW DELHI: The Indian government can rest easy as private players have bid optimistically and with courage for FM radio licenses in metros and other cities falling under A and A+ categories.

An initial collation of numbers available indicate that the government might rake in over Rs 5 billion in licence fee from 13 cities for which financial bids were opened here today.

The second round of auctioning of FM radio licences, despite the losses being touted by the existing players, indicate that the bids have increased almost four- fold from the first round in 2001 when a licence in Delhi went for slightly over Rs. 90 million.

Companies like HT Music, Adlabs, Entertainment Network India Ltd (ENIL, which runs Radio Mirchi), Music Broadcast Pvt Ltd (Radio City) and South Asian FM have emerged as gainers by successfully bagging multiple licenses in cities.

For example, the Anil Ambani-controlled Adlabs has been successful in winning the race for licenses in the cities of Delhi (bid of Rs 280 million), Mumbai (Rs 280 million), Kolkata (Rs 60 million), Chennai (Rs 90 million), Hyderabad (Rs 60 million) and Bangalore (Rs 120 million), amongst others.

The government today opened bids for 64 radio stations in 13 cities and decided to allot stations to 29 bidders. A total of 64 frequencies were up for grabs.

For all the cities in which bids were opened today, HT Music and Entertainment Network's quote of Rs 350 million for a licence in Mumbai emerged as the day's top score.

Even as the government officials compute the figures for the 13 cities at the end of the day, it has been clarified that all the successful bids are subject to final clearance from competent authorities.

Figures unraveled today show huge variations ---- for example, the highest quote in Bangalore was of Rs 210 million, while the lowest was just Rs 50 million --- indicating that the understanding of the radio market of players too vary in the absence of any uniformity.

Figures unraveled today show huge variations ---- for example, the highest quote in Bangalore was of Rs 210 million, while the lowest was just Rs 50 million --- indicating that the understanding of the radio market of players too vary in the absence of any uniformity.

Were bids like that of Radio Mid-Day West's in Delhi (Rs 314 million) and Adlabs' in Mumbai (Rs 281 million) on the higher side? Have the players bid again high this time too, like last time in 2000?

"I think the top bids were reasonable and within expectation. There is buoyancy in the (ad) market," ENIL deputy CEO Prashant Pandey pointed out.

But the Bhaskar group, which is poised to get the go ahead from the government in Ahmedabad and Jaipur, amongst other cities, feels that the bids were on the higher side.

"We have bid in eight cities and from the way the bidding is progressing, we feel the players have bid on the higher side,? Dainik Bhaskar Group's deputy general manager (projects) Sanjay Jain opined.

Concurring with Jain is Radio City whose parent Music Broadcast Pvt Ltd (MBPL) bid in nine cities of the 13 cities that went under the hammer and won licences in seven of them. (Radio city is already operational in cities like Delhi and Mumbai.)

?We bid rationally and we are thrilled to have been successful in seven cities. However, we feel that some of the players could have got the licences at a more reasonable price,? Radio City CEO Apurva Purohit told

From this Friday onward, financial bids for FM licenses will be opened on the next four Fridays to complete the process for 334 licenses being offered in 91 cities across India.

There have been surprises too. For example, South Asia FM. The company?s background is not known, but it has bid aggressively to win licences in Surat, Pune, Nagpur, Kanpur, Ahmedabad, Jaipur and Lucknow.

Industry sources say that this is a company which is backed by a South Indian media conglomerate that could have some alliances with a South East Asian broadcasting company.

In 2001, 108 FM radio licences were hawked across 40 cities. Only 21 frequencies are operational today, of which two have decided to close down.

Since most of the companies are privately held, profit and loss figures would have to be based industry estimates.

Last year, private FM radio stations paid licence fee to the tune of Rs 3.5 billion and accumulated a loss to the tune of approximately Rs 2 billion . The total revenue earned by FM radio companies in the year was just Rs 1100 million.


DELHI: six licensees on offer; seven bidders; 2 disqualified

Radio Mid-Day West Rs 314 million, Adlabs Rs 281 million, HT Music Rs 280 million, Clear Media Rs 133 million, Radio Today Rs 102 million.

Pan India (an Essel Group company) with a quote of Rs 75 million, along with Delhi Press Prakashan were disqualified as per norms as their bids were below 25 per cent of the quote of the highest bidder.

MUMBAI: Four licenses; 4 bidders; 1 disqualified.

HT Music Rs 350 million, Adlabs Rs 281 million, Radio Today Rs 100 million. Pan India with a quote of Rs 65 million disqualified.

KOLKATA: 5 frequencies; 9 bidders

Adlabs Rs 61 million, HT Music Rs 60 million, Ananda Offset Rs 50 million, Radio Today Rs 32.4 million and Radio Mid-Day Rs 32.1 million.

BANGALORE: 7 frequencies; 9 bidders

ENIL Rs 216 million, KAL (Sun TV group) Rs 200 million, Adlabs Rs 129.6 million, Indigo Rs 92 million, HT Music Rs 60 million and Radio Today Rs 30 million.

CHENNAI: 6 licenses; 9 bidders

Radio Mid-Day West Rs 122 million, Adlabs Rs 90.9 million, Muthoot Finance Rs 80 million, Music Broadcast Pvt Ltd Rs 80 million, Malar Publication Rs 63 million, Noble Broadcasting Rs 52 million.

AHMEDABAD: 5 frequencies; 6 bidders.

South Asia FM Rs 121 million, Synergy Rs. 120 million, MBPL Rs. 65 million and Radio Mid-Day Rs 51 million.

(Rs 45= 1US$)


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