<div><em>The </em>costliest <em>FM radio licence was bagged by HT Media which picked up the lone Delhi station for Rs 169.16 crore while the</em> <em>cheapest bid for a FM station, at its reserve price, went to RBNL’s Big FM in Aizwal for Rs 12.07 lakh, writes <strong>Ashish Sinha</strong></em></div><div><br>Central government will get to pocket around Rs 3,000 crore revenue from the third phase of FM radio auctions – Rs 1,187 crore from auctions, rest from Migration Fees. That is the upside. The downside is only 97 stations across 58 towns were bought leaving 38 stations (out of 135 station) in 11 cities remained unsold. Big Players will gain with a much wider reach while smaller centres will experience the power of private FM radio.</div><div> </div><div>For 21 eligible bidders, it took 125 rounds of clock auctions, Rs 1,187 crore and over one month of agonising wait to bid and win 97 FM stations across 58 towns. For those interested in numbers, the average cost per station worked out to be Rs 12.23 crore, the highest compared to the previous two phases of private FM radio auctions (FM-I in 2002 & FM-II in 2006). </div><div> </div><div>The costliest FM radio licence has been bagged by HT Media which picked up the lone Delhi station for Rs 169.16 crore. It again bid aggressively at Rs 122.81 crore to own one of the two FM stations available in Mumbai. HT Media also picked up a station in Hyderabad. In total, HT Media Ltd has spent Rs 340 crore to bag 10 FM station licences – average cost per station of Rs 34 crore. To its credit, HT Media picked up seven stations at their reserve price. These stations are located in the Hindi heartland of Uttar Pradesh – Lucknow, Kanpur, Agra, Aligarh and Gorakhpur were purchased at reserve price along with Bareilly and Allahabad.</div><div> </div><div>The cheapest bid for a FM station, at its reserve price, went to RBNL’s Big FM in Aizwal for Rs 12.07 lakh.</div><div> </div><div>Entertainment Network India Ltd (ENIL), the radio broadcasting unit of Bennett, Coleman and Co. Ltd, also spent Rs 339 crore to bag 17 stations to extend its tally of Radio Mirchi brand to 49 stations (up from 32 stations earlier). Radio Mirchi’s 49 station network includes the licences it bought for Amritsar, Patiala, Shimla and Jodhpur from Oye FM of the India Today Group. In terms of newer cities, Radio Mirchi has acquired stations in Chandigarh, Kochi, Kozhikode, Jammu, Srinagar, Guwahati, Shillong and second frequencies in Bengaluru, Hyderabad, Ahmedabad, Pune, Kanpur and Lucknow, among others.</div><div> </div><div>ENIL CEO Prashant Panday said that the company will roll out the Mirchi brand in all the new towns. Big FM’s chief Tarun Katial said he was hoping to launch the new stations within the current fiscal. Panday of Radio Mirchi said too few frequencies in the metros after almost a decade of the second phase was not desirable. In his opinion, the FM auctions were not a success for the government. Panday said some of the new stations will take half a decade to break even.</div><div> </div><div>Smita Jha, media practice head at consulting firm PriceWaterHouseCoopers, said the auctions were successful because it was transparent and earned the government 110 per cent on its reserve price. Experts pointed to the scarcity of spectrum in the metros did not help the bidders as it pushed the prices very high.</div><div> </div><div>Music Broadcast Pvt. Ltd, which is now a part of the Dainik Jagran Group, Reliance Broadcast Network Ltd (RBNL), DB Corp. and Rajasthan Patrika Pvt. Ltd were the other major media groups who won FM stations.</div><div> </div><div>RBNL, which operates under the FM radio brand name of Big FM, bagged 14 stations and spent Rs 117 crore in the auctions. It acquired stations in Pune, Nagpur, Lucknow, Patna, Varanasi, Kolhapur among others taking its overall tally from 45 stations to 59 stations.</div><div> </div><div>The Dainik Jagran group, that owns the Radio City brand (Music Broadcast Private Limited) won 11 stations with its overall tally of FM stations touching 39 stations. This includes stations under the brand name of Radio Mantra and Radio City. Apurva Purohit, CEO, Radio City 91.1 FM, said it won frequencies in the markets that it was keen on.</div><div> </div><div>According to the 2015 media and entertainment industry report by the Federation of Indian Chambers of Commerce and Industry and KPMG, the radio sector is witnessing a CAGR of 18 per cent and is expected to touch revenue of around Rs 4,000 crore in 2019 compared with Rs.1,960 crore in 2015.</div><div> </div><div>As per the frequency allocation plan, HT Media will now have a new frequency of 107.2 MHz in Delhi for its latest acquisition apart from Fever 104 that it already operates. In Mumbai, it will operate its new acquisition on 91.9 MHz. ENIL, which operates its Radio Mirchi brand on 98.3 Mhz will operate its Hyderabad stations on 95 and 104 MHz. In Kanpur, HT Media will operate on 104 MHz but ENIL will operate on 91.9 MHz. In Aligarh, HT Media has been allocated 94.9 MHz but in Bareilly it will operate its station on 94.3 MHz. In Shillong, RBNL, Big FM will operate on 98.3 MHz while ENIL’s Radio Mirchi will operate on 91.1 MHz.</div><div> </div><div>ashish.sinha@businessworld.in</div>
