Highly placed sources confirmed that the network is working on the radio project, the broad policy regarding which has been recently announced by the Union information and broadcasting minister Pramod Mahajan.

Zee radio project would form a part of the profit centre that has been put under the CEOship of Deepak Shourie. The division would also include Zee's print media business.

However, whether the division would be spun off into a separate company is not yet clear. With the I&B ministry deciding to allow 30 per cent FII equity holding in companies interested in bidding for an FM channel, decks are more or less cleared for Zee Telefilms Ltd to get into the fray, sources added.

The modalities of the bidding process are being worked out by the I&B ministry in consultation with the potential radio broadcasters. Licences for FM radio broadcasting would be issued for a period of 10 years.

Apartfrom Zee, big media houses like the Living Media group and Bennett, Coleman & Co are also in the fray to start their separate FM channels.

Significantly, this would be a new area that Zee would be exploring along with internet and film production. Further, the company would have the added advantage of having prior experience as a broadcaster as well as its in-house music business, Zee Music.

Zee is also planning eight regional language television channels for which the network is setting up an earth station at Noida. The foray into radio would make the network a comprehensive electronic media company. The Rs 1,200-crore group is already well placed in satellite broadcasting as well as cable distribution.

SitiCable, which is part of the network's `Distribution' profit centre, has already test-marketed its latest service, internet, in Bangalore. The formal launch is expected in the next six months.

The network has recently completed a restructuring process entailing creation of 13 profit centres beingheaded by separate deputy CEOs. The network has proposed entering new media forms as a strategy to expand the gamut of its operation.