Policy Reforms in Indian Radio Sector will open up doors to new players

Radio stations in India have faced financial crisis in the past and present. Maintenance, license fees and up-keeping the station have proved to be difficult tasks. With commercial radio station it is even more difficult. It is true that radio has begun with the Phase III where the expansion of radio stations in India is going to be really huge, but the one thing that is difficult to acquire in this case is the finance.

These problems will soon be resolved because Indian government has made some revolutionary changes in the investment sector. Radio which has experienced an increase in outdoor listenership to 23.1% which is a huge leap will also be benefiting from new investment reforms.

The FDI in Radio sector in India has been increased to 49% from 26% in 2013, the rest 51% will be with the parent company holding the crucial rights but 49% of foreign direct investment is a great hike in Radio. This will surely give courage to the new players who want to inaugurate new radio stations. The new phase with 839 frequencies against existing 245 will be able to see a greater achievement in auctions with these new reforms. Radio broadcasters in India were surely rejoiced by the news.

 “It’s terrific that the government has increased the FDI (limit) to 49%. It will come handy for radio broadcasters who have spent Rs.3,000 Crore in the last couple of months on renewal of licenses and the Phase 3 auctions,” said Prashant Panday, chief executive, Entertainment Network (India) Ltd (ENIL) that operates the Radio Mirchi FM stations.

The Indian government is also planning to dictate license fees on the basis of Net Income of a Radio Station so that loss making radio stations can still be in the game and get a chance to grow.

These changes will give a much needed boost to Radio Stations in India and apart from Commercial station there will be in an increase in Community Radio stations as well. So let’s hope that new stations come up fast so that we can enjoy different music genres that satisfy our taste buds and a more a niche market can be created for listeners where advertiser can cater to a particular kind of listeners.