MUMBAI: With the Indian government having allowed foreign investment in FM radio ventures, the sector has started singing deals.
Radio FM operator Radio Today, part of the Aroon Purie-controlled The India Today Group (ITG), is poised to ink an equity stake agreement with Measat Broadcast Network Systems, Malaysia's digital multi-channel satellite DTH broadcaster and supplier of broadcast-related support services.
A senior executive of ITG while confirming that talks with Measat are in an advanced stage, however, said that a formal agreement "has not been signed yet. But, he added, it could happen over the next few days."
If the deal is concluded, it will become the second instance where a foreign player will be picking up stake in an Indian FM radio operator after the government permitted foreign investment up to 20 per cent in this sector
BBC's proposal to acquire up to 20 per cent stake in Radio Mid-Day, which operates a station in Mumbai, for Rs 118.7 million has got the finance ministry clearance.
Astro All Asia Network, the holding company of Measat, operates eight FM terrestrial radio stations in Malaysia, including the top-ranking stations for all the key Malay, Chinese, Indian and English vernacular demographics.
These stations cumulatively reach more than 10 million listeners a week or 62 per cent of all radio listeners, and command over 79 per cent of the radio industry's advertising expenditure.
How much money can Radio Today, operating FM radio stations in three cities under the Red FM brand name, mop up through such an equity sale as and when it comes through?
It will depend on the valuation of the Indian company, which is still a small part of the multi-million dollar ITG and considered a younger sibling of TV Today Network that is a listed company.
Radio Today, having stations in Delhi and Mumbai, is also among the first list of 70 applicant companies that have qualified for financial bids for the second phase of FM radio broadcasting in India covering 90 cities and over 300 frequencies.
Measat has been scouting the Indian market for a radio foothold from the time Sushma Swaraj was the information and broadcasting minister in the early part of this decade.
While in the mid-1990s Measat had a pact with pubcaster Doordarshan for a DTH service (that never got off the ground), in 2004 December, Astro entered into a $ 25 million agreement with Sun Network, which also runs some FM radio stations in India, for the establishment of a joint venture to originate, aggregate and distribute television programming and channels for a global audience.
Interestingly, the Malaysian media group, according to information available, presently provides studio infrastructure and airtime sales and programming services for two radio stations in Kolkata.
